Old Money: How demographic change will reshape real estate

The key question is how these long-term shifts will translate into real estate outcomes and what they mean for investors in practice. This means understanding how demographic change is supporting new sources of growth, where it is introducing pressure and how portfolios may need to adapt as a result.

Growth opportunity: Medical offices and distributed healthcare delivery

Across developed markets, the response to rising healthcare costs from ageing populations is converging on a common solution: decentralised care delivery. Moving activity out of expensive inpatient hospitals into community-based, outpatient and home settings is both fiscally necessary and clinically viable, enabled by remote monitoring, telehealth and AI-assisted diagnostics. The result is a structural shift away from the traditional hospital-centric model toward a distributed network of lower-intensity care environments designed for frequent, shorter patient interactions.

For older populations specifically, this shift is reinforced by the nature of the conditions they carry. Cardiovascular disease, diabetes, respiratory conditions and musculoskeletal disorders, the chronic conditions most prevalent in ageing cohorts, are precisely those best suited to outpatient management: recurring, monitoring-led interactions that require clinical-grade facilities but not hospital-level intensity. An ageing population does not simply generate more healthcare demand, it generates a different kind: more continuous, more distributed and more frequent.

In Asia Pacific, the direction of travel is clear even where investment markets remain underdeveloped. A 2025 WHO-commissioned study of long-term care systems across Australia, Japan, South Korea and Singapore⁸ found universal government commitment to shifting care away from institutional settings toward community and home-based delivery, driven by the fiscal imperative of managing rapidly ageing populations at lower cost. Japan, Singapore and South Korea have each introduced specific legislative and structural reforms to devolve care delivery into local, outpatient and home-based settings, with funding models increasingly designed to incentivise lower-cost, distributed care.

These developments are structurally supportive of demand growth in the Medical Outpatient Building (MOB) sector, facilities that accommodate outpatient care, diagnostics and specialist services outside of acute hospital settings. In practice, MOBs become the key real estate interface for outpatient services, diagnostics, day treatment and chronic disease management within a distributed care system. From an institutional perspective, they therefore represent the most scalable and investable vehicle through which to access the broader structural shift toward lower-acuity, healthcare delivery.

The US stands as the ready-made example of a scaled, institutionalised medical outpatient building sector, with 1.6 billion square feet of built stock and liquid transaction markets⁹. Elsewhere, development is relatively nascent. Within Europe, markets such as the Netherlands and Germany are currently better aligned with the MOB model, reflecting more decentralised healthcare systems and a clearer separation between healthcare delivery and property ownership¹⁰. Even so, in markets where investment infrastructure is still nascent, demographic pressures and policy direction suggest a meaningful opportunity for early‑mover capital.

Across markets, the repurposing of obsolete, often suburban office and retail stock, represents an underappreciated opportunity within the sector. The locations of structurally vacant assets frequently overlap with the accessible, community‑based catchments preferred by outpatient operators, allowing investors to address two structural imbalances simultaneously.

Alongside the growth in outpatient facilities, the home itself is becoming the final node in a distributed care network. The shift to home-based care delivery is already measurable across developed markets in Europe and Asia Pacific, where the share of the 65 and over population receiving long-term care at home is steadily rising.

As care delivery scales into the home, the physical characteristics of residential stock – including accessibility, connectivity and design – are becoming clinically relevant specifications, not just lifestyle preferences. Buildings designed or adapted to support this delivery will command a premium not just from owner-occupiers and renters, but increasingly from healthcare operators and insurers seeking suitable stock for home-care delivery. For investors in residential assets, this creates both an opportunity and risk, with the volume of in-home care delivery set to accelerate ahead of any meaningful supply response in accessible, healthcare-residential stock.

Growth opportunity: The missing middle of senior housing

As households age, many remain in family homes that were designed for a different stage of life. This has created a growing pool of underoccupied housing that often lacks support for ageing in place, opening up a range of housing investment opportunities that extend beyond seniors to the broader market.

There is a clear and well-publicised need for more senior housing which, historically, has been equated with institutional care. Yet longer lifespans and improving ‘healthspans’ are shifting the centre of opportunity away from traditional care homes and towards earlier stages of the ageing journey. The most underserved segment could develop in the space between family homes and care facilities, with housing that offers a balance between the two: purpose-built, accessible homes complemented by shared amenities, social spaces and optional support services that enable residents to live independently for longer.

Australia can provide an early template for the development of independent and assisted living, designed for active older adults who are not yet in need of clinical care. With this kind of real estate space now accommodating more than 5% of its 65 and over population, the country stands out as being relatively mature compared with countries like South Korea and the UK, where comparable supply figures sit at 0.12%¹² and 0.6%¹³ respectively. Even where markets are more developed though, current supply lags well behind anticipated need.

Rising wealth and a preference for active, experience‑led retirement are underpinning demand for care‑light, amenity‑rich communities in core urban locations, particularly among affluent seniors seeking to remain in vibrant cities.

Yet investors should also look beyond core city centres to access deep senior demand pools. Well-connected suburbs are also likely to offer significant opportunity sets: areas close enough to major cities to access their social and cultural infrastructure, affordable enough to support viable development, and already home to large concentrations of households approaching retirement.

Providing the right kind of housing that supports both the need for community and an active lifestyle could help shift attitudes among older households, encouraging downsizing and, in turn, enabling the release of family homes that are in short supply for younger generations.

Source: M&G Real Estate, May 2026.

However, even if existing stock were unlocked at any scale, the Japanese experience highlights how having the right kind of stock but in the wrong place can simply exacerbate existing challenges. With one of the world’s oldest populations, it now counts over nine million empty homes or ‘akiyas’¹⁴, a figure that continues to rise. However, this surplus has done little to relieve supply pressures in cities like Tokyo or Osaka. Much of the vacant stock sits in rural and semi-rural areas that are unlikely to attract younger households.

Here, demographic decline is not producing housing abundance, it is producing a growing housing mismatch that also needs to be solved. This pattern will likely be replicated in other countries as populations age, and institutional capital has a key part to play in trying to reduce that mismatch by investing into homes across the living spectrum, from modern, well-located multi- and single-family to assisted and independent senior living schemes.

These impacts also go beyond just living. Queensland has emerged as a leading destination for healthy older households within Australia, with strong net in-migration of people aged 65 and over contributing to above average population growth. This cohort has expanded at 3.7% annually, more than double the rate of Queensland’s wider population since 2019, with older residents now accounting for more than 1 in 6 people¹⁵. Comparable dynamics are visible in the US Sun Belt, particularly Florida, where long-established patterns of retiree in-migration¹⁶ have resulted in one of the highest concentrations of older residents nationally¹⁷. This ultimately reinforces demand not just for housing but across the wider real estate ecosystem, including retail and logistics markets.

Growth opportunity: Supporting the silver traveller

Ageing populations will transform leisure and hospitality from a sector defined by seasonal peaks and volume-driven growth, into one increasingly supported by year-round high-value demand. Over 65s sitting on a lifetime of accumulated wealth show no signs of withdrawing from the economy. How and where they choose to deploy it will be one of most significant drivers of consumer spending over the next two decades.

Travel and tourism will likely be one of the biggest beneficiaries of this shift in spending power. Historically, one of the sector’s most persistent challenges has been seasonality, but older travellers are not bound by school holidays or the rhythms of the working week. As this cohort grows in size and influence, demand will become more evenly spread, reducing volatility and supporting more stable occupancy and revenue profiles year-round.

Larger savings pools and higher disposable income will also mean older consumers are less price-sensitive and more focused on quality, comfort and experience. This will translate into higher spend per stay, greater use of on-site amenities, and stronger demand for upper mid-scale and luxury formats, as this cohort trades up in ways that many younger travellers simply cannot afford. In China, the silver traveller already spends 30% more than the average tourist, with a clear preference for higher-end hotel formats, an early indication that this is likely to play out across other markets as wealth continues to concentrate in older cohorts²⁴. With greater spending power and more years of healthy, active life ahead of them, this cohort will likely favour premium hotel formats that blur the boundaries between hospitality, wellness and healthcare.

For investors, the silver traveller represents a structural shift in how and where hospitality demand is generated, rather than a passing niche trend. A significant opportunity is the structural growth of domestic travel, as older consumers bring greater frequency, higher spend and more flexible timing to easy-to-reach locations. Traditional resort or coastal holiday spots will likely continue to thrive but cities that serve as cultural or ‘experience’ hubs will also see stronger – and weather-agnostic – year-round demand, supporting a growing opportunity for hotels across a broad range of locations.

Growth opportunity: Retail – the end of ‘trend’ and the return of need

Population ageing will also act to reallocate broader consumption trends, redirecting demand towards service-led, health-oriented and everyday needs-based categories and away from trend-led discretionary goods. Rather than a story of retail decline, this suggests further reinvention, where the type, location and purpose of retail space will need to evolve to reflect new patterns of spending.

An older demographic likely means an accelerating shift away from fast fashion, high-turnover discretionary goods and youth-oriented formats, towards categories that require physical presence, regular visits and accessible locations.

This will be clearly visible across the high street, shopping centres and retail parks. As spending rotates toward health, wellness and everyday services, the tenant mix will follow. Shopping centres will evolve into multi-functional buildings anchored by healthcare, dining, and community-focused uses, moving beyond being places that older consumers visit simply for spending convenience. This is already beginning to play out. In Singapore, for example, older residents are increasingly using suburban malls as community anchors – visiting daily to meet friends, dine and maintain routines that keep them socially connected, rather than focusing purely on shopping²⁵.

Retail parks, with their ease of access and simple layouts, are naturally aligned with the needs of this cohort. GP surgeries, diagnostic centres and health-focused retail will become core components of this format’s offerings alongside traditional occupiers, generating footfall that is consistent, recurring and far less exposed to the cyclical pressures that have weighed on traditional retail.

The consequences will extend beyond these formats. In the EU, internet usage for buying goods or services has risen for 65–74 year olds, from 47% in 2015 to 55% in 2025²⁶. As this cohort becomes more comfortable shopping online (and more digitally-fluent generations age into it), demand for home delivery will grow, ranging from food and groceries to medical supplies and prescription medicines. This will quietly but directly drive demand for last-mile logistics and cold-storage facilities, as delivery networks expand to meet the needs of an older population. With longer, healthier lifespans deepening this trend, the 65 and over cohort represents not just a retail story, but a broader investment case also spanning urban logistics and the supply chains built around them.

Not all retail will benefit equally from this shift, and the gap between winners and losers is likely to widen. As older consumers gravitate towards locations that offer accessibility, convenience and a high quality of life, well-connected suburban areas around major cities are likely to become the primary beneficiaries of this demand.