Octopus Capital, an asset manager investing in the people, ideas, and industries that will change the world, today publishes a new report examining the future of elderly care in Spain, as the country faces a widening mismatch between demographic demand and care home provision.
The report – “Shaping the future of care in Spain” – draws on demographic analysis, market data, and insights from the UK’s more established care market, and explores the scale of undersupply, the structural drivers behind it, and the role long-term institutional capital can play in delivering modern, high-quality care.
Spain has the highest life expectancy in the European Union at 84 years, placing it at the forefront of Europe’s ageing demographic, yet care infrastructure has not kept pace. Spain already faces a shortfall of nearly 100,000 care beds, even before future demand is factored in. To meet projected needs, the report finds that care bed capacity must increase from approximately 384,000 today to around 616,000 by 2033. This challenge is compounded by the fact that much of the existing stock is outdated and expected to fall out of use, further tightening already constrained supply.
Demand is being driven not only by increased longevity, but by systemic changes in health and society. Chronic conditions such as dementia are becoming more prevalent, driving higher levels of dependency and more complex care needs, with dementia cases across Europe expected to rise by around 60% over the next two decades, while by 2060, the population aged over 80 is forecast to more than double.
At the same time, social changes are reshaping how care is delivered. Traditional family-based care models have weakened as urbanisation, increased workforce participation, and changing family structures reduce the capacity for informal care. Together, these trends are accelerating demand for professionally delivered, purpose-built care homes faster than current supply can respond.
The report, in part, attributes this slow response to the Spanish decentralised governance structure, with 17 autonomous communities, each with its own regulatory framework for governing elderly care. Operational costs are also a challenge, which in 2024, led to care home investment lowering due to economic pressures from hiked inflation and interest rates. Reputational risk too is noted as a potential drawback, with, for example, hesitation caused by stories seen at the time of the COVID-19 pandemic.
However, the report argues that these challenges are surmountable. On regulation, complexity can drive innovation. Real estate and operational strategies can be tailored to fit local requirements, while ensuring a consistent standard of high-quality care from region to region. As for investment levels, they saw significant pick up in 2025 with operational costs levelling out. Then looking at reputational risk, the report underscores how care homes are among the most highly regulated sectors in healthcare and a transparent approach, paired with responsible investment is critical to success.
The report concludes by highlighting Spain as a compelling long-term investment opportunity. The country benefits from a strong public healthcare system, efficient operators, and the lowest cost per care bed in Europe. Recent history shows that new, high-quality care homes are filled quickly, which is even the case for much larger homes than seen in the UK, underlining to investors both the reliability and resilience of income of this asset class.
Cristina Perez Liz, Head of Spain and Co-Head of Real Estate Investment at Octopus Capital, commented:
“Spain’s demographic trajectory is clear. People are living longer, often with more complex care needs, yet the supply of modern, high-quality care homes has not kept pace. What this report demonstrates is that the shortfall is not marginal or temporary — it is structural and growing. At the same time, Spain has many of the right foundations in place: efficient operators, a strong public healthcare system, and clear demand across multiple regions.
“With the right long-term capital, local partnerships aided by a presence in Spain, and a commitment to quality, care provision can be scaled in a way that delivers stable and resilient outcomes for investors. We hope thisreport encourages investors to see the sector’s demographic-driven, non-cyclical returns as an attractive avenue for institutional capital.”
Mike Toft, Co-Head of Head of Real Estate and Head of Care Homes at Octopus Capital, added:
“Care homes are a fundamental part of social infrastructure, and the need for them is only becoming more pressing as populations age. The experience we have built over many years across the UK shows that when regulation, specialist expertise, and patient capital align, it is possible to deliver both financial and societal value.
“Spain does not need to reinvent the model, but it does need private capital and long-term thinking to modernise and expand its care sector. There’s a clear opportunity here to support a sector that plays a vital role in society, meeting a growing need while backing purpose-built care homes that are truly fit for the future.”
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