Community investing responds to an ageing population – Crowdberry enables the co-ownership of the largest private facility for seniors dependent on medical care and patients with Alzheimer’s disease in Bratislava. Thus, through crowd-investing, it is available for private investors, making it a unique investment opportunity in Central Europe as a whole
Last week I again visited the Dúbravka forests and I could not believe that I was still in Slovakia’s capital city of Bratislava – only a stone’s throw away from the city centre. Beautiful landscape, trees, fresh air and peace … only except for the construction works proceeding on the reconstruction of the former training centre and hotel campus into a modern home for seniors with uninterrupted nursing care complemented by a comfortable centre for clients with Alzheimer’s disease.
Construction works are in their final phase and towards the end of the year, the first clients will be accommodated in one of the total of 147 beds. We visited the site with the whole Crowdberry team as part of regular visits and monitoring of the construction’s progress. As a matter of fact, last year in Crowdberry we made a relatively bold step and decided to offer investors our first real estate project, which has in common with the previously introduced tech startups or rapidly-growing young SMEs perhaps only the legal structure for doing business. SeniorHouse – Dúbravská oáza convinced us with the strength of its team, their unique idea, the immense amount of work they have put into the project over the last five years and the vision of renowned investors, who apart from a stable dividend also seek an opportunity for safe returns on capital also during economic crises or fluctuations in financial markets.
We are seeking investors and co-owners for the company Griffin, which is behind the development of SeniorHouse – Dúbravská oáza with a capital raise goal of 1.65 million euros. On a Europe-wide scale, this is a truly unique type of co-investing into facilities which were until now reserved only for professional investors and investment funds. I would like to explain to you why that is so, and why we believe that it is worthwhile to support the company by investment and become a long-term co-owner, earning attractive returns.
Our population is ageing, bringing new challenges and opportunities
An ageing population is a major challenge for all of Europe. The Council for Budget Responsibility, an independent body that monitors and evaluates the fiscal performance of Slovakia, predicts that the number of people over 80 years old will double over the next 15 years. With this, the number of people requiring intensive care at old age will grow. Today, people aged 60 and above account for over a quarter of Slovakia’s population and in 30 years it will be almost 40%.
Similarly, the development of Alzheimer’s disease in Slovakia does not provide a positive outlook. The Slovak Alzheimer’s Society (Slovenská Alzheimerova spoločnosť) expects the number of patients to more than triple by 2035.
All these predictions and forecasts are based on Slovak birth rates, which are among the lowest in Europe, as well as on expectations of the gradual increase in average life expectancy of men and women, which is continuously on the rise since the 1980s – though still among the lowest in the European Union. Infrastructure that would be able to manage such trends is not in place. Already today we can observe that the waiting period for a place in government-owned retirement homes with nursing care is 6 to 18 months. The situation is not better in affordable private facilities either, which are occupied at over 90%. In the Bratislava region alone 2 500 people awaited a placement last year, from which there were over 700 people urgently awaiting accommodation directly in Bratislava.
Facilities with quality care at an affordable price are in short supply
Investments that are introduced on the Crowdberry platform to a significant extent bring innovations into their industries and disrupt them. Sometimes it is a technology, other times complete products and services, or perhaps a new approach to the working and structure of a particular industry. The question thus presents itself – what could be so innovative in the areas of real estate and care for the elderly? In all honesty, I will tell you that it is nothing unexpected, no blockbuster. Clients of the centre will not live in virtual reality, their rehabilitation will not take place with the help of nano-robots and they probably will not be in touch all day with their friends and family using 3D holograms. When we met Jaroslav Jakubčík, the director of the facility, in Crowdberry, however, who together with his team and renowned investors introduced the project of a centre providing clients 24/7 care in a uniquely conceptualized spacious campus with modern equipment at affordable prices and with an extraordinarily large capacity even on a countrywide level, we did not hesitate.
The team that the director of the new centre is building, just like himself, has decades of experience at running facilities of uninterrupted care. And they have a clear vision: on the Slovak market, where there is a shortage of cultured and well-equipped facilities and where there are no big players ensuring quality care, they wish to build a chain of retirement and nursing homes providing high-quality yet affordable care for clients in Slovakia, as it is common in other EU countries. They are beginning in the Bratislava district of Dúbravka, where in two years’ time they will be employing 90 nurses, medical assistants, caretakers, doctors and therapists. SeniorHouse – Dúbravská oáza will be the largest and most modern private centre for seniors and patients with Alzheimer’s disease with increased need for care and nursing.
Co-owning a company with over 90 employees with extensive property and lots directly in Bratislava or at the end of the day simply helping a socially beneficial project whilst also earning attractive long-term and stable returns is an accurate definition of the SeniorHouse investment campaign. Simply said, all in one.
How is the investment into SeniorHouse unique?
Investments into real estate have for centuries been considered a safe method to preserve and enhance capital. Larger buildings and projects, however, are almost exclusively owned by large investors or multinational investment funds. Smaller investors generally focus more on investment apartments/houses. Current market prices and continuously growing supply, however, pose the question of whether the peak of that market has been reached. Smaller investors thus usually do not have the reach and opportunity to choose a specific, professionally prepared real estate asset which they would own as an investment or at least purchase a smaller stake of.
The introduction of SeniorHouse – Dúbravská oáza has changed this. Investors will become co-owners of 4 buildings with a construction area of over 3,500 m2 and with lots of over 21,000 m2. Co-ownership of property and lots in an attractive location represents a relatively lower risk compared to other investments. This comes without the usual real estate concerns associated with renting and maintenance expenses and in an optimised tax structure.
At the same time, SeniorHouse appealed to us as it is a company with a greater goal, helping to address the unsolved problem of a lack of capacity and quality care. Investors will aid in the building of these centres and will enable in their first phase for almost 150 people to gain quality services and care in modern and welcoming facilities. At the same time, the present investment round lays the groundwork for the expansion of capacity to a final 247 places.
An investor becomes the co-owner of a company with expected annual revenues of 3 million euros, 90 employees and with plans to replicate the same model all over Slovakia. The investor will thus also participate in the company’s commercial outcomes. The business plan focuses on long-term commercial viability of the entire complex and expects the first payouts of priority dividends to Crowdberry investors by 2020. Following expansion and the addition of another 100 places, the economics and returns for investors will become even more attractive.
For this reason we repeatedly visit the facility and actively run an investment campaign on the Crowdberry platform. We are convinced that the opportunity we are bringing to the Slovak and Czech markets is truly unique, which is also the root of its innovativeness.
Author: Michal Nešpor, partner at Crowdberry