Can sale and leaseback cure care industry’s ills?
Despite all the talk of an ageing population, and an ever increasing number of over 85s, the UK’s ailing residential care industry needs to consolidate further if it is to improve its margins, according to the HSBC bank’s latest economics report “Taking the Pulse – Nursing and Residential Homes”. A combination of over-capacity, rising staff costs and shrinking revenues has driven many operators out of business in the past few years. There has also been consolidation among the large corporate operators, which has led to the residential care sector becoming increasingly polarised between larger companies operating nursing homes and small owner-operators who mostly run residential homes. In an industry operating on tight margins, raising capital through conventional means is becoming more and more difficult. HSBC chief economist Dennis Turner said the gap created had quickly been filled by other options such as sale and leaseback schemes, where property is sold to an interested party and leased back as a going c