Rumours refuse to abate in the care industry on the possible property disposal of Four Seasons care homes forced by the need to raise equity following warnings.
According to Property Week troubled Cheshire-based Four Seasons Health Care has released £60m of property from its portfolio following various reports in the national newspapers warning that the UK’s largest care provider could run out of money in the next few months. The care home provider operates 470 homes and has more than 20,000 beds.
“Four Seasons has put 14 individual properties on the market, which are understood to be worth as much as £30m in total and are being sold by Christie & Co as going concerns. Agents told Property Week that these were set to be sold before the end of the year, even though many are distressed properties located in lower-value areas in the regions”; says Property Week.
Property Week also commented that Four Seasons is set to appoint Knight Frank to market their investment portfolio of care homes run by third-party operators up for £30m. Knight Frank has yet to confirm this.
The entire care sector is going through a challenging time due to a combination of factors. There has been under-funding of care, as the fees local authorities pay to homes are less, in real terms, than they were five years ago. There’s also a national shortage of nurses which means that care homes and hospitals have to rely on expensive temporary agency staff. In addition the changes in salaries to accommodate the minimum wage and Living wage is said to be impacting on both large care providers and smaller independent care operators.
Whilst the new National Living Wage is welcomed because care home operators want staff to be better paid for the important and challenging job they do, it will add to costs and this has raised concerns about the financial performance of all care providers, both in the care homes and domiciliary care markets. Meanwhile, Four Seasons is said to be paying more than £50m a year in interest on debts of £500m, and launched a financial review in August after its Q2 losses were £26m.
Last month credit-rating agency Moody’s downgraded its own credit score for the care home business.
So far all parties have refused to comment.