business | surveys & data
Care home deals ‘significantly ahead of pre-pandemic levels’, says Christie & Co The number of care home deals is “significantly ahead of pre-pandemic levels” with completions up by 78% in 2022 compared with 2020, according to Christie & Co.
I
n its first ‘Care market review 2022’ report, the business property advisor said offers this year were at an average of 101% of asking price, reflecting strong investor appetite with competitive bidding commonplace. Rob Kinsman, regional director, care at Christie & Co, said: “The last couple of years have presented the sector with huge operational challenges, but it is heartening to see that investor appetite has fully recovered. We have confidence that the entrepreneurial nature of the sector will ensure the transactional market continues to thrive despite the growing economic headwinds.” New instruction levels rose by around 30% from 2020 to 2021 as operators capitalised on buoyant market conditions and strong values achieved.
14 | DECEMBER 2022/JANUARY 2023
The most active buyer type over the past five years has been independent operators with one or two homes, which accounted for 41% of sector deals. The proportion of deals completed to corporate operators and investors stood at 22% in 2018. This dropped down to just 9% in 2021, when larger providers and investors paused their acquisitions due to the pandemic. From 2018 to 2022, there has been a decline in first-time buyers, which accounted for 16% of transactions in 2018, dropping to only 7% in 2022. This is likely to be reflective of the increasing funding challenges for first-time buyers, and the regulatory burden of the Care Quality Commission. The decrease can also be attributed to an increase in quality, higher-value stock coming to the
Rob Kinsman
market. Larger, regional multiple groups increased their market presence in 2021, accounting for 40% of transactions, up from 32% in 2020, showing they remained keen to expand their portfolios even though the sector was battling with the pandemic. This year, corporate operators and investors have accounted for 33% of deals, with first-time buyers at 7%, down by 9% since 2018. As a percentage of the overall total, deals brokered to regional multiple groups dropped in 2022. The report says buyers were increasingly looking further afield due to a competitive marketplace and the increased use of technology in care homes which can allow for some operational work to be done remotely. Almost half (48%) of deals this year were concluded by buyers who live 100 miles from their target business. A large number of deals were concluded in and around urban centres, although transactions in rural and coastal areas were also up. More than 1,500 care homes ceased trading between 2015 and 2020 with over 40% of these having Good ratings and being closed for reasons other > CARING-TIMES.CO.UK
