The demand for senior housing in Canada will proceed to rise, particularly over the following decade. The inhabitants of seniors aged 75 and older is predicted to extend by 111.2% between 2014 and 2034, considerably boosting the necessity for senior housing and associated providers.

What’s extra, the senior dwelling market in Canada is anticipated to register a compound annual development price (CAGR) of roughly 5% from 2024 to 2029. This development is pushed by the growing older inhabitants and the growing demand for specialised housing and care amenities.

The rising demand for senior housing has attracted important curiosity from buyers and actual property builders, resulting in elevated capital flows and building exercise within the sector. And but, the marketplace for senior housing in Canada is comparatively fragmented, with a mixture of native, small builders and some bigger branded gamers. That is why the key leaders available in the market ought to proceed to see large demand. Let’s take a look at why.

Extendicare

First, we now have Extendicare (TSX:EXE), which offers a spread of providers, together with long-term care, dwelling well being care, and retirement dwelling. This diversification permits the corporate to seize completely different segments of the senior care market, offering stability and a number of income streams.

Extendicare has been strengthening its portfolio by means of acquisitions, akin to its partnership with Sabra Well being Care REIT to promote 11 senior dwelling belongings. This enlargement will increase its market share and skill to fulfill rising demand. Moreover, Extendicare advantages from authorities contracts and subsidies for long-term care, guaranteeing a gentle income stream and assist for enlargement initiatives.

Then there are the present causes to speculate. Extendicare’s earnings per share (EPS) have proven a exceptional improve, whereas income elevated to $367.1 million within the first quarter (Q1) of 2024. This was pushed by greater long-term-care funding, improved occupancy charges, and development in dwelling well being care providers. Internet working earnings (NOI) noticed a modest improve to $44.7 million regardless of greater working prices. So, with a 6.23% dividend yield, bettering funds, and a powerful market, Extendicare inventory definitely seems to be promising.

Sienna Senior Dwelling

Subsequent, we now have Sienna Senior Dwelling (TSX:SIA), which focuses on high-quality private-pay retirement properties and long-term care. The acquisition of private-pay retirement belongings boosts its profitability and positions it nicely to cater to prosperous seniors searching for premium providers.

Sienna’s strategic partnerships, akin to with Sabra Well being Care REIT in addition to by means of a three way partnership, allow it to broaden its footprint and improve service choices. This permits Sienna to capitalize on the growing demand for senior dwelling amenities. Sienna’s deal with operational effectivity and bettering occupancy charges helps it handle prices and improve profitability, making it well-positioned to profit from the rising demand for senior housing.

As for earnings, Sienna’s EPS has proven some volatility, with a notable improve in the newest interval. Whole adjusted income for Q1 2024 elevated by as nicely, and whole NOI elevated by 74.9% to $63.5 million, pushed by authorities funding and operational enhancements. In the meantime, it holds a 5.9% dividend yield for buyers to think about.

Chartwell Retirement Residences

Lastly, we saved the largest for final. Chartwell Retirement Residences (TSX:CHP.UN) is likely one of the largest operators of retirement residences in Canada. Chartwell advantages from economies of scale and a powerful model fame. This positions it nicely to draw a big share of the rising senior inhabitants.

Chartwell’s built-in service mannequin consists of unbiased dwelling, assisted dwelling, and reminiscence care. This permits it to cater to a variety of senior wants, growing its market attraction. Moreover, its funding in fashionable amenities and facilities aligns with the rising shopper demand for high-quality, community-oriented dwelling areas. This enhances its attractiveness to potential residents and helps greater occupancy charges.

As to its earnings, Chartwell’s EPS has skilled volatility. Nevertheless, internet earnings has seen spectacular development, significantly in 2022 and once more in 2023. Resident income elevated by $18.1 million (10.9%) in Q1 2024, and same-property adjusted NOI elevated by 24.7%. And with a dividend yield of 5.35%, it definitely deserves your consideration.

Backside line

The growing demand for senior housing in Canada presents important development alternatives, particularly for Extendicare, Sienna Senior Dwelling, Chartwell Retirement Residences and, after all, these investing in them. Altogether, Extendicare, Sienna Senior Dwelling, and Chartwell are in robust positions to thrive within the rising senior housing market in Canada.