Business

Octopus Capital launches £400 million rental fund to transform UK senior living market

Saturday, 1 November 2025 5:04AM UTC

Octopus Capital plans to introduce a £400 million rental-focused fund aimed at retirees, signalling a major shift in the UK senior living sector towards the rental model, inspired by global trends and driven by changing consumer preferences and regulatory factors.

Octopus Capital, a major player in the UK senior living sector, has revealed plans to launch a £400 million fund dedicated to rental properties targeted at retirees. This move signifies a shift in the later living market, traditionally focused on homes and apartments for sale, towards the rental model that is more established in mature markets such as the U.S., Australia, and New Zealand. The announcement was made by Domas Karsokas, Investment Director at Octopus Capital, during Bisnow’s Later Living Summit in London.

The new fund aims to attract institutional investors and is expected to adopt a closed-ended structure, though an open-ended option is also under consideration. Its investment focus will primarily cover the UK and Spain, with possibilities to expand into other European countries including Germany, Italy, France, Denmark, Ireland, and Scandinavia. Octopus currently manages approximately £1.8 billion in senior living assets, reflecting its significant presence and expertise in the space. Karsokas highlighted strong, ongoing sector tailwinds and suggested that capital inflows into UK senior living are poised to accelerate as investor familiarity and confidence grow, despite the sector's operational and regulatory complexities.

The rental model is gaining traction not only with investors but also with older customers. Steve Bangs, CEO of Pegasus Homes—a company recently pivoting entirely to building rental senior living properties—explained that residents increasingly prefer renting over owning to avoid the long-term burdens of homeownership. Benefits include greater flexibility and the ability to "hand back the keys" when the home no longer suits their needs. The growing tax burden on homeowners, potentially exacerbated by forthcoming budget changes, also contributes to this trend away from ownership and toward rental living in retirement.

Octopus’s entry into this rental-focused strategy complements its broader ambitions within the affordable and specialist housing arenas. The firm recently launched an Affordable Housing strategy targeting £200-300 million to accelerate the supply of genuinely affordable homes, including those for older populations, ensuring sustainable and high-quality developments under regulatory oversight. This aligns with Octopus’s wider commitment to address undersupply and improve living standards in ageing and vulnerable communities.

Alongside rental housing, Octopus is active in the development of high-quality retirement villages through partnerships such as with Elysian Residences. Recent projects include a 100-unit integrated retirement community in Henley-on-Thames and a £55 million retirement village in Royal Tunbridge Wells. These developments offer a mix of apartment sizes and luxury amenities aimed at fostering vibrant retiree communities, reflecting a comprehensive approach beyond purely residential offerings.

Notably, Octopus also invests in the care home sector, currently facing a shortage of modern, purpose-built facilities. With over 16 years of healthcare real estate experience and collaborations with more than 30 care home operators, Octopus is addressing the rising demand for quality care alongside its rental and affordable housing initiatives.

Together, these activities position Octopus as a key driver of innovation and growth in senior living in the UK and beyond, responding to changing consumer preferences, demographic shifts, and regulatory landscapes. The move towards rental senior living marks a significant evolution that capitalises on both market demand and emerging investment opportunities, suggesting that the floodgates for capital in this sector may indeed be opening.

📌 Reference Map:

Paragraph 1 – ^[1] (Bisnow)
Paragraph 2 – ^[1], ^[2] (Bisnow, Octopus Capital announcement)
Paragraph 3 – ^[1] (Bisnow)
Paragraph 4 – ^[1] (Bisnow)
Paragraph 5 – ^[3], ^[4] (Octopus Investments Affordable Housing announcements)
Paragraph 6 – ^[5], ^[6] (Octopus partnership with Elysian Residences)
Paragraph 7 – ^[7] (Octopus Capital care homes portfolio)

Source: Noah Wire Services

More on this

https://www.bisnow.com/london/news/senior-housing/octopus-plans-400m-rental-senior-living-fund-as-sector-takes-off-131661 - Please view link - unable to able to access data
https://www.bisnow.com/london/news/senior-housing/octopus-plans-400m-rental-senior-living-fund-as-sector-takes-off-131661 - Octopus Capital is planning a £400 million fund focused on rental properties in the senior living sector, aiming to raise capital from institutional investors. The fund will primarily target the UK and Spain, with potential expansion into other European countries. Octopus currently manages approximately £1.8 billion in senior living assets. Investment Director Domas Karsokas highlighted the sector's growth and the increasing interest from investors seeking value-add returns due to operational and regulatory complexities.
https://octopusgroup.com/newsroom/latest-news/octopus-investments-launches-uk-affordable-housing-strategy/ - Octopus Investments has launched an Affordable Housing strategy targeting initial commitments of £200-300 million from institutional investors. The strategy aims to accelerate the delivery of genuinely affordable homes across the UK, focusing on high-quality and sustainable developments. Octopus has acquired a Registered Provider of Social Housing to operate a direct let model, ensuring fair risk-sharing with Housing Association partners and compliance with regulatory oversight.
https://octopusgroup.com/newsroom/latest-news/octopus-investments-announces-50m-first-close-of-affordable-housing-fund/ - Octopus Investments has announced the first close of its Affordable Housing Fund with £50 million in capital from London CIV, the investment pool for 32 of London’s Local Government Pension Schemes. The fund aims to accelerate the delivery of good quality and genuinely affordable homes across the UK, with plans to build more than 500 affordable family and older persons homes in various locations.
https://octopusgroup.com/newsroom/latest-news/octopus-real-estate-and-pic-team-up-with-elysian-residences-again-to-deliver-best-in-class-retirement-village-in-henley-on-thames/ - Octopus Real Estate and Pension Insurance Corporation (PIC) have partnered with Elysian Residences to develop a 100-unit Integrated Retirement Community in Henley-on-Thames. The development will offer a mix of one-bedroom, two-bedroom, and three-bedroom homes, providing a vibrant community with excellent amenities and services. This marks the third investment by the partnership with Elysian Residences, reflecting their commitment to addressing the underfunding in the senior living sector.
https://octopusgroup.com/newsroom/latest-news/uk-retirement-living-fund-managed-by-schroders-capital-and-octopus-acquires-55m-retirement-village-in-jv-with-elysian/ - The UK Retirement Living Fund, managed by Schroders Capital and advised by Octopus Real Estate, has acquired a £55 million retirement village in Royal Tunbridge Wells in a joint venture with Elysian Residences. The development will include 89 luxury apartments, penthouses, and hotel-style facilities, aiming to create a thriving community for retirees in the area.
https://octopus-capital.com/investment-capabilities/real-estate-investment/care-homes/ - Octopus Capital focuses on investing in care homes that are fit for the future, addressing the undersupply of quality care homes and the demands of an ageing population. With over 16 years of healthcare real estate experience, Octopus has a portfolio of more than 100 modern, purpose-built care homes and has partnered with over 30 care home operators to ensure high standards of care and sustainability.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 10

Notes: The narrative is fresh, with no prior publications found. The announcement was made on 31 October 2025, and no earlier versions with differing figures, dates, or quotes were identified. The content does not appear to be recycled or republished across low-quality sites. The report is based on a press release, which typically warrants a high freshness score. The inclusion of updated data without recycling older material further supports this assessment.

Quotes check

Score: 10

Notes: The direct quotes from Domas Karsokas and Steve Bangs are unique to this narrative, with no identical matches found in earlier material. This suggests the content is potentially original or exclusive.

Source reliability

Score: 8

Notes: The narrative originates from Bisnow, a reputable organisation known for its coverage of real estate and senior housing sectors. This adds credibility to the report. However, the reliance on a press release as the primary source introduces a slight uncertainty, as press releases can sometimes present information in a biased manner.

Plausability check

Score: 9

Notes: The claims made in the narrative are plausible and align with Octopus Capital's previous activities in the senior living sector. The focus on rental properties for retirees reflects a growing trend in the industry. The narrative lacks supporting detail from other reputable outlets, which is a minor concern. The language and tone are consistent with typical corporate communications, and there are no excessive or off-topic details. The tone is formal and appropriate for the subject matter.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative is fresh, original, and sourced from a reputable organisation. The claims are plausible and consistent with Octopus Capital's known activities. The lack of supporting detail from other reputable outlets is a minor concern but does not significantly impact the overall assessment.

Senior Living
Real Estate Investment
UK Housing Market