Distress eases and expansion begins in the care market

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Richard Lunn-Care Industry News (167 x 250)Average business property prices in the care sector increased by 9.8 per cent during 2014 as activity improved driven by new investors together with increases in the volume and quality of stock coming to market according to Business Outlook 2015, the annual state of the markets report by specialist property adviser Christie + Co, which was launched on 15th January 2015.

 

Christie + Co’s Director and Head of Care Richard Lunn says: “We saw investors, primarily from North America, actively target the UK care sector in 2014.  This was responsible for driving a number of major transactions at aggressive pricing.”

 

Progression from turnaround to transformation was a key theme during 2014. The care market has been dominated by distress for some years so the improvement in the number of new investors led to a considerable gain in momentum during 2014 albeit against a backdrop of increased regulatory scrutiny and limited increases in Local Authority fees.

 

Richard Lunn says: “Investors’ appetite for the care sector is continuing and we are seeing specialist care businesses becoming key targets for an ever increasing pool of buyers including US and UK based Special Situation Funds, Hedge funds, Private Equity Funds and Healthcare Real Estate Investment Trusts (REITs).”

 

 

A highlight of the year was the closure of a deal involving one of the largest care home operators in the UK which was announced in November. Christie + Co advised care group HC-One on the deal which was worth £477m.

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