SPECIAL REPORT


market overview


Focus on care sector developments


T


he care home market is becoming an increasingly-attractive proposition for both operators


and investors, as the Government announces plans to increase social care budgets and the demand on bed places rapidly increases. Over the next three years demand for


care home places is expected to far exceed the number of bed spaces currently available, which means new projects are being planned up and down the country. Demand is forecast to increase by


around 9,000 beds a year and this has made the market extremely attractive to the private sector, with more than 75% of all homes now operated by private firms. NHS beds account for just 1% of the total provision. Hayley Thornley, research manager at


AMA Research, said: “The private care home market continues to attract new investment. “In the longer term, the care homes


sector is expected to outperform the wider healthcare market due to an acute undersupply of appropriate accommodation together with increasing demand from an ageing population, with the number of people aged over 65 in the UK forecast to be 50% higher in 2035 than it was in 2010.” In terms of type of development,


AMA Research studies show significant activity in new and emerging areas of the care market, particularly care villages and extra care schemes. Companies at the forefront of this


activity include Crown Care Group, which recently received £4m in funding from Yorkshire Bank for a new 78-bed elderly care home in Hucknall, north Nottinghamshire. The facility will be specially designed


for people with dementia and will add to Crown’s 14 other care homes across the North East and Yorkshire.


Overall, the care operator has


announced plans to invest more than £115m on a network of new care villages and residential homes across the UK, further evidence of the attractiveness of the market to investors and social care operators. And Octopus Healthcare recently


agreed to acquire a portfolio of seven new care homes, investing more than £110m after raising in excess of £133.5m for its Octopus Healthcare Fund. The acquisition builds on the


company’s existing partnership with Care UK, one of the country’s largest care home operators. Ben Penaliggon, director at Octopus


Healthcare, said: “The acquisitions are a strong endorsement of both our ability to source and acquire high-quality UK care homes, of the appeal of this asset class to investors, and the highly- supportive demographic trends that drive it. “This marked the end of a successful


year for the fund, during which it has secured over £279m of transactions into the UK elderly care home sector.” And Baycroft, a subsidiary of One


Housing, has announced plans to build over 1,000 units for older people in the next three years.


www.baycroft.co.uk www.amaresearch.co.uk www.octopushealthcare.com www.crowncaregroup.co.uk


Investors poised to inject capital into health sector


D


espite the predicted downturn in construction activity, the UK remains a major market for


infrastructure investors worldwide. A report published recently by


Octopus Group quizzed 100 global investors with a combined $6.8trillion in assets, exploring the drivers shaping opportunities in the sector. And it reveals that around $200billion


– £155billion – will be injected into the global healthcare infrastructure market over the next five years, with the UK one of the most-attractive regions for potential investment. In the UK, 73% of respondents said


they would increase allocations, and 26% plan to do so by more than 10%. The report states: “A combination of


diversification and the sector’s low correlation with broader financial markets emerge as the prime drivers for investment in healthcare infrastructure. “Respondents recognise that returns


from healthcare infrastructure are mostly uncorrelated to traditional asset classes and financial markets. And this is becoming increasingly important for investors as they look to recession- proof portfolios amid a volatile investment backdrop.” It concludes: “Healthcare


infrastructure has captured the attention of institutional investors around the world. “The investment will be crucial to


ensuring the ageing population receives the quality housing and care they will need.”


www.octopusgroup.com healthcaredm.co.uk 13


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