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| Christie+Co confident that volumes will rise in 2010 |
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Caring Times, February 2010
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The annual 'Market Intelligence 2009' and 'Business Outlook 2010' reports by Christie+Co are superb opportunities for the care sector to evaluate its performance and that of closely related business sectors.
Having inspected almost 15,000 businesses during 2009, Christie's Chairman David Rugg agreed that '2009 was a difficult year ... a year that many were relieved to leave behind - but one that also provided a number of encouraging highlights.' He added that transactional activity had finally 'found its base level during 2009' and that the economic pattern of this recession in transactional terms mirrored those in 1989 into the early 1990s. Although history does not necessarily repeat itself, he was 'reasonably confident that transaction volume rises will occur in early 2010.'
The report showed that values in the hotel sector dropped by 19.5% during 2009 and by 34% from the hotel market's peak in 2007. Pubs declined by 20% and 29% from 2007 peak levels and restaurants by 18% and 30% respectively. Retail values did best with an 11% fall in 2009 and 16% since 2007.
The care sector did better than hotels, restaurants and pubs with a fall in property values in 2009 of 11% and 26% since 2007. There were a number or reasons for this fall, said Richard Lunn, Head of Care. 'The major operators turned their backs on the transactional market in 2009, in order to focus on improving operating efficiency and addressing debt levels. Leverage issues continued to inhibit transactional activity at a corporate level in 2009.
'Private equity groups did not abandon the sector completely but they were rarely able to find suitable opportunities. Volume and quality were key issues as owners held on to assets, realising they couldn't better their returns by investing elsewhere.
'Many of the properties that reached the market had some degree of distress, otherwise they simply wouldn't have been sold.'
Lunn continued: 'The slowdown in the residential property market has opened up a range of opportunities for care operators.
'The reduction in land and construction costs has enabled those who are able to obtain funding to develop new facilities in prominent locations.
'The Care Quality Commission will play a key role in shaping the progress of the UK's care sector in 2010.'
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