Knight Frank has launched its annual Seniors Housing Annual Review, revealing the performance of the Seniors Housing Residential sector. In this year’s report, Knight Frank surveyed operators who have £4bn of assets collectively within the retirement housing market.

The survey underlines the pivot that investors are taking towards long-term inflation hedged cashflows, with more operators offering reduced annual charges in return for higher Deferred Management Fees (DMF) or charges, mixed tenure options and BTR.

The findings from the survey revealed that 68% of the operators surveyed are now offering two or more DMF options, a significant increase compared with 38% who offered the same last year.

The report by Knight Frank also highlights the increasing importance of ESG considerations in the senior housing sector. Around 94% of operators surveyed said ESG will be important for their business strategy over the next five years. Certifications such as BREEAM have become a main point of focus, with 91% of operators targeting them to showcase sustainability and wellbeing credentials in their developments.

Tom Scaife, head of seniors housing at Knight Frank, said: “Larger DMFs and flexible payment options allow more cost risk to be shared between the tenant and investor, creating long-term alignment. It allows income sensitive tenants to fund their senior living purchase and allows operators to provide high quality amenities with higher staffing levels and high-quality services.”