Market analysis


Post-pandemic care home sales set to rise


CSI Market Intelligence founder and director Mike Short takes a look at the findings from his recently-published Say Hello Wave Goodbye 2020 report on the residential care home market


There is every indication the care home market will see a sizeable growth in the number of homes that are bought and sold over the next few years. The pandemic has contributed to this, as 2020 saw a 13 per cent decrease on the previous year as care homes were put in lockdown - many planned sales or deals were put on hold or removed from the marketplace. Figure 1 shows that trades were


down by 11 per cent between 2020 and 2019. If Four Seasons Health Care’s administration deals are included, the reduction is 33 per cent. The year-on-year reductions reached 48 per cent during the last three quarters, i.e. after the initial lockdown in March 2020. Yet it is clear there are many providers


looking to change their involvements within the sector, with Christie & Co. research findings seeing around 36 per cent of respondents said they are planning on selling their business or some assets in 2021, with 29 per cent planning on acquiring. There will obviously be some providers


that have had to handle the pressures of the pandemic for a full year and could be thinking ‘Maybe I have had enough’, while there will be others thinking ‘If I have got through this, what more can I achieve?’. Additionally, HC-One has announced


they will be selling 52 of their homes to “local providers” they believe will be in a better position to deliver care, as well as closing four other homes.


Down 11% Down 33%


Figure 1: Care homes for older people bought/sold in England 2019


2020


The market mix Despite the government, the media and therefore the public appearing to believe care homes for older people in England are run by large offshore conglomerates, it has never shared the characteristics of a typical 80/20 marketplace where a small percentage of providers account for a majority of supply. It has always been made up of a


large number of small independent providers, with a total of over 5,600 different providers on the Care Quality Commission (CQC) register across 9,800 homes. The top 20 ‘brands’ accounted for only 18 per cent market share at the beginning of this year. In January 2016, there were seven


key brands each with over 100 locations, sharing a total of 3,267 care homes. By


Around 36 per cent of respondents said they are planning on selling their business or some assets in 2021, with 29 per cent planning on acquiring


14


2020 less 4 seasons


January 2021, that has dropped by around 8.5 per cent to under 3,000 locations (see Table 1). As Four Seasons is in administration and HC-One is planning further disposals, that figure will reduce even further. No new brands have entered this ‘100-plus’ group. Four Seasons has been in


administration since 2019 and has sold around 68 of their homes to smaller groups in 2020. Those sales made up around 25 per cent of all trade deals during that year. Global professional services firm Alvarez & Marsal is poised to auction a further 140 of Four Seasons’ remaining 184 homes across the UK. Elsewhere, there are currently around


100 fewer BUPA-branded care homes than five years ago. Meanwhile, HC-One has grown from 177 to 265 care homes in the past five year but their planned sell off - and four additional closures- will bring them down nearer to 200. Orchard Care Homes went into


administration in 2018 and what was 148 care homes has become just 23 owned by Indigo Care Homes. There has been slight increase with Care UK – now rebranded Practice Plus


www.thecarehomeenvironment.com • April 2021


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57