Market analysis


- but Anchor Trust – the only not-for- profit brand in this group, is now smaller – including the sale of eight care homes to Surrey County Council in 2019. The only brand to have shown any


real growth in that time is Barchester Healthcare, which in addition to buying up some of Four Seasons homes in 2020 has also opened four new homes during last year.


Buying a care home So if you are looking to join the queue to buy a care home - or a group of homes - where do you look? There are a number of barriers on the route to finding the right locations. Many of those wishing to sell a home


or care business will not want to do so on the open market, so as not to let their staff, residents and their families know what they are planning. It could also affect the ability to continue to attract new residents should word get around. That means a sale could either be


‘off-market’ or on a confidential basis. Off-market is a good way to purchase as it would probably mean less competition with rival buyers, but identifying these opportunities is obviously not easy. With a confidential sale, an agent


will need to impart some details about the home – region, number of beds and other features such as CQC inspection rating - if ‘Good’ or ‘Outstanding’. That information means the location could still be identified – and certainly CSI Market Intelligence has the tools to do that. The number of registrations and


care home beds is also key. There are a number of financial models that measure the benefits, and issues associated to size – normally favouring the larger home. Whilst we see new homes opening that


100 plus brands 2016 Four Seasons BUPA Group


HC-One Limited


Barchester Healthcare Orchard Care Homes Anchor Trust


Care UK/Practice Plus Total


Table 1


CSI has seen a number of providers with a wide spread of homes across the country selling off parts of their group to make it easier for them to manage a more localised portfolio of homes


are larger than those that are closing, the typical size of a care home on the open market is generally of a smaller size. Figure 2 shows that from a random sample of homes currently for sale around half are 25 beds or less, while only a quarter of all homes are of this size. Furthermore, while 41 per cent of care homes are over 40 beds in size, they only account for 15 per cent of homes for sale. There will also be a particular care


sector that a potential buyer will be looking for, either nursing or residential, with or without dementia specialism. That said, CSI has found that around 45 per cent of nursing only care homes purchased over the last two years have since been changed to nursing dementia - the largest and only growing market sector in England. Geography is also important insofar as


For sale All homes


51% 41% 36% 27% 31% 15%


Figure 2: Care homes for sale by size versus market total Up to 25 beds


26-40 beds April 2021 • www.thecarehomeenvironment.com 41 beds plus


existing providers will be looking for new locations that fit in with their operational capabilities. CSI has seen a number of providers with a wide spread of homes across the country selling off parts of their group to make it easier for them to manage a more localised portfolio of homes. The other geographical issue is local


supply levels. Probably due to the high percentage of private enterprise that has created the care home market as it looks today, care homes have not always been opened where there is a need for more care facilities. Indeed, there is a massive variance in the number of beds available to the relevant local population. So, even if you find a care home that fits


all your requirements - e.g. a large purpose built nursing dementia home with large en- suite rooms that are ideal for the private funding client - you may well find that there are a number of similarly featured homes in this area, most achieving low than viable occupancy levels. CSI has been able to help prevent


prospective buyers moving into such a situation but we have also been able to encourage others where the local area market conditions are low and high occupancy levels can be achieved. So, if you are looking to buy, should


the HC-One situation be of interest to you? Well, their portfolio of homes is predominantly nursing, with 70 per cent in this sector compared to 40 per cent across the country.


15


2016 303 227 177 170 148 120 106


3,267


2011 118 125 265 206 23


114 117


2,989


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