Finance
per cent year on year, from 38 per cent in 2023 to 43 per cent in 2024. Typically, these operators will be wanting to acquire the larger homes of 35+ beds – potentially a better quality than their existing assets. This strategy of acquisition and demand is further supported by our data through 2023 – and H1 of 2024 – remaining at its highest since 2021. This demand has seen multiple bids on targets, causing values to remain solid. When seeking to expand portfolios, operators will need to be well prepared with funding strategy. This is an area where Christie Finance has supported multiple clients, making sure they are financially fit to acquire. For existing operators looking to capitalise on opportunities, the evolving pace of financial and economic markets demands a heightened level of due diligence and integration – far more rigorous than in previous years.
Robust financial modelling, supported by strong operational structures, is
Christie & Co completions by buyer type (source: Christie & Co’s Care Market Review 2024)
crucial to demonstrate to lenders how any new acquisition will be seamlessly integrated into their organisation. Financial forecasts must comprehensively account for all potential cost changes, including utilities, agency fees, wage increases, and anticipated fee adjustments. When operators seek to expand their
portfolios, a significant portion of our time is spent consulting with clients and their professional advisors on debt structures. This involves identifying opportunities to restructure finance into vehicles aligned with the client’s long-term plans and working closely with funders to ensure they fully understand the transactions and the client’s aspirations.
New entrants For new entrants, the key areas to focus on will be the quality of experience or management team. Lenders will seek confidence in how well a new entrant can operate their first acquisition, what their career history is, and what direct experience they can bring. The next focus should be on the target acquisition. What is the quality of the current service provision? What is the regulatory rating? What is the financial performance? Is the current management and senior management remaining? The funding market is still challenging
Christie & Co transactional analysis (source: Christie & Co’s Care Market Review 2024) 20
to navigate for first time buyers; however, we have supported many to acquire their first home. Preparation is key to a successful funding application. A lot of our process is to fully understand a clients’ plans with any potential target. For first-time buyers, the funding market can often seem overwhelming, with high-street lenders offering varying levels of support and a growing pool of alternative lenders to consider. Over the years, we have learned the importance of carefully understanding the options available and leveraging their strengths to create the right funding solutions. Similar to existing operators, every potential acquisition is assessed on its own merits. Unlike the residential mortgage
www.thecarehomeenvironment.com February 2025
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