Connor Spence, investment manager at Rathbones Investment Management International, reflects on the investment opportunities created by ageing populations
AGEING populations are creating a range of investment opportunities in areas that can be neatly summarised as “beds, sheds and meds” – housing, logistics, property and healthcare.
“Meds” is shorthand for healthcare and, of the three, appears to offer the strongest long-term growth potential. Healthcare systems across many developed economies are already under pressure from rising demand, higher costs and a growing number of older people living with multiple long-term health conditions. As populations age, the need for healthcare services is only likely to increase.
This creates opportunities in areas such as medical technology, preventative healthcare and community-based care. Policymakers are increasingly recognising that treating illnesses earlier and closer to home can be both more effective and more cost-efficient than relying heavily on hospitals. As a result, investment in primary-care centres and healthcare infrastructure is expected to remain a major theme in the years ahead.
“Sheds” is shorthand for warehouses and distribution centres. The continued growth of e-commerce has increased demand for modern logistics facilities, and demographic trends may provide an additional tailwind. As people become less mobile later in life, the convenience of online shopping becomes increasingly valuable, allowing goods to be delivered directly to their homes. This supports demand for the warehouses and distribution networks that keep those supply chains moving.
“Beds” refers to housing and accommodation associated with later-life living. Newly retired people often relocate based on lifestyle preferences, seeking access to leisure activities, amenities or coastal destinations. As they grow older, priorities tend to shift towards convenience, healthcare access and support services. This creates demand across a spectrum of housing options, from age-friendly homes to assisted-living developments and care facilities.
By contrast, the outlook for office property may remain more challenging. Demographic change could contribute to workforce shortages, while advances in technology and artificial intelligence may allow businesses to maintain productivity without expanding their office footprint. Although high-quality, sustainable buildings should remain in demand, lower-quality office space is likely to face continued pressure.
