Czech bank Česká spořitelna plans to invest up to 11 billion Czech crowns, or around €450m, in elderly care properties. The investment is to create approximately 5,000 long-term care places in the Czech Republic over the next five years.
The funds will be channeled through its subsidiary Dostupné bydlení České spořitelny, which has so far mainly worked on affordable rental housing projects. The company is now expanding its activities into long-term care infrastructure.
First projects in three regions
2.5 billion Czech crowns have been allocated for the initial phase, which is expected to provide around 1,000 places. The first three projects must be submitted within six months. They are being selected in Prague, the Moravian-Silesian and Liberec regions.
The planned investments may include both the acquisition of existing properties and new construction. Marek Blaha, CEO of Dostupné bydlení České spořitelny, told Hospodářské noviny: “Long-term social problems require not only public funds but also private capital. The bank can be not only a lender, but also an active investor and partner of cities and municipalities.“
Shortage could grow to 35,000 places
The plan comes against the backdrop of a shortage of long-term care places in the Czech Republic. According to data presented by Česká spořitelna, the country currently lacks more than 15,000 places. The shortage is expected to grow to around 35,000 places by 2035, and the necessary investments in additional infrastructure are estimated at around 70 billion Czech crowns.
The bank intends to be primarily an institutional investor in the properties, while the operators will be responsible for the day-to-day operation and provision of care. Partnerships with municipalities, construction companies and social service operators are envisaged.
The company is also planning an independent system for certifying the quality of care together with the Association of Social Service Providers in the Czech Republic.
Expanding the Affordable Housing Program
The new strategy builds on Česká spořitelna's existing affordable housing program. So far, around 4 billion Czech crowns have been invested in it. Around 700 homes have been completed and fully occupied, and another 300 are under construction.
By entering the nursing home sector, the bank is expanding its investment activities from residential construction to long-term social and health infrastructure.