Tag: Corporate Analysis
As much as £13.5bn of equity could be invested in healthcare real estate this year, according to the inaugural
Healthcare Investor Survey launched at the end of January by global real estate advisor CBRE.
The survey audited the intentions of the 50 major investors who dominate the market and own £16bn of assets between them. They range from healthcare REITs and institutional investors with healthcare exposure as well as those from the development sector and private equity community.
Of the key investors in the healthcare market, over three quarters (77%) defined themselves as a net buyer, as opposed to a net seller, which is not always the case in the investor market.
Tom Morgan, senior director, CBRE Healthcare, said that, with so much capital to deploy, and now armed with deeper and more extensive market knowledge, institutional investors were dramatically expanding the range of … Read More »
Crowd Bonds, a type of debt-based crowdfunding, are gaining traction in the healthcare investment sector with a particular focus on high quality care homes, according to crowdfunding platform Downing Crowd.
Downing Crowd itself has launched a new £2.5m Crowd Bond for two established care homes in Scotland. operated by Care Concern.
Downing currently has invested more than £45m in 11 care homes. Earlier this year, the Downing Crowd platform also raised £3m for a luxury care home in Edinburgh with the same management team, hitting the target investment within eight days. Investing in this type of market is not entirely new to Downing with the company gradually building its expertise over time after making its first move into the sector back in 1998.
Head of Downing Crowd, Julia Groves, said shifting demographics had created ideal conditions for fresh investment in the sector, but … Read More »
Major care home operator Four Seasons Health Care has published a proposed financial and property restructuring package.
The key elements of the proposal, planned for implementation in November, are that:
Major stakeholder Terra Firma will inject equity value by way of 24 homes outside of FSHC that they valued at £136m in December 2016. These homes would contribute an estimated EBITDA increase of £18.9m and a cash flow increase of £17.1m.
Proposed refinancing of the debt with existing Senior Secured Notes (SSNs) of £350m being exchanged for £350m of new SSNs which would come with an extensive guarantee and first ranking security package granted by the restructured group. Under the proposal, the existing Senior Notes (SNs) of £175m will be exchanged for £60m of New SNs and 20% of the equity in the restructured group. In addition, there would be no payment of … Read More »
In reporting its financial performance for the second quarter of 2017, major provider Four Seasons Health Care says there has been across-the-board
improvement in earnings, occupancy and quality ratings.
Four Seasons chairman Robbie Barr said that in the second quarter of this year, EBITDA of £13.5m was 14% higher than in the first quarter, bringing EBITDA for the first half of this year to £25.3m, 11% ahead of the comparative period last year.
Turnover for the second quarter was £164.5m (£163.9m in Q1). Turnover for the first half of this year was £17.5m or 5.7% ahead of the comparative period last year, on a like for like basis, after adjusting for closures and disposals.
Occupancy across the group’s care homes in Q2 was 89.4%, compared to 87.5% during the comparative period in 2016.
Mr Barr said the group’s care quality ratings continued to improve, with … Read More »
Caring Times, July/August 2017
According to the latest market update from Savills Healthcare, strong fundamentals combined with an ageing demographic in the UK has made healthcare, and in particular, care homes, a very attractive asset class. The international real estate advisor notes that the long indexed income with either RPI or fixed uplifts have made an appealing proposition for investors struggling to find similar opportunities in the mainstream markets. In addition, care home yields have moved in significantly over the last five years and now fall in line with many other traditional commercial asset classes. Savills Prime Care Home Yield Index currently stands at 4.25%, down from 4.75% in 2016.
These fundamentals are supported by strong demand for good quality care homes, fuelled by an increasing 75+ years population and an imbalance between the number of care homes opened and those closed … Read More »
Having opened 12 new services during the past 12 months, the Regard Group –the UK’s fourth biggest private care-provider in the learning disabilities
and mental health sector – has also acquired nine new services and expects to expand organically as well by opening and filling a further dozen facilities within the next year.
The organisation’s EBITDA have grown 76% since 2014, due to a combination of organic growth, new openings and their merger with ACH.
The 12 established new services all have all filled very quickly, and management attributes this success to their careful monitoring of and targeted response to relevant local authorities’ demands.
Regard currently supports 1066 individuals across the country – a new record for the care-provider – and has introduced 110 new beds in the last two years as a result of new services opening.
Founded in 1994, the organisation employs more … Read More »
Caring Times, March 2017
Care provider St Cecilia’s Care Service Ltd is adding to its portfolio with the addition of the former Queen Margaret’s Nursing Home in Scarborough.
The investment is a positive move for St Cecilia’s and for Scarborough and bucks the current trend which has seen a downturn in the national care home market. Since 2010, 380 care home businesses have gone under and between 2015 and 2016, the number of nursing homes fell from 4,697 to 4,633 – the first decline in five years.
St Cecilia’s Care Services is an award-winning, family-owned Scarborough business providing a range of care services to enable older and vulnerable adults to enjoy a happy, safe and enjoyable quality of life. It consists of the St Cecilia’s care home which provides high quality, compassionate care, in a homely and welcoming environment for up to 21 … Read More »
Transaction activity is booming in the elderly residential care market across North America and Western Europe, according to financial consultants Clearwater International, who say the activity is driven by the availability of cheap debt, an increasingly ageing population, rising demand for specialist care for conditions such as dementia, and reablement care.
In the United States in November, Second Spring Healthcare Investments acquired a portfolio of 64 skilled nursing facilities from Welltower Inc., the listed US real estate investment trust, for €990m. AIM Group Holding Limited bought a portfolio of three senior living communities in areas surrounding Washington D.C. and Atlanta, for €104m and SHA Housing Limited purchased a €30m portfolio of supported living assets from Topland Group.
In Europe, Clearwater has advised Colisée Group on the acquisitions of elderly home care providers Bien à la Maison and Nouvel Horizon Services. They have … Read More »
A report commissioned by BBC Radio 4’s ‘You and Yours’ programme suggests more than a quarter of care homes in the UK are in danger of going out of business within three years.
The report, compiled by business risk analysts Opus Business Services, said about 5,000 homes were at risk of closure because they carried too much debt and did not make enough profit to cover loan repayments
Opus business risk adviser Nick Hood said that, on average, care homes made £17,647 in profit before tax and that individual care homes were borrowing about 61% of the value of the business on average – a figure that amounted to £4bn across the industry. He said there were 20,000 care homes in the UK, operated by 5,871 individual owners who made, on average, about £60,000 annual profit as operators.
“It leaves a very small … Read More »
Caring Times Latest
While the Financial Times and Health Investor magazine have both reported that Bupa is to put about 200 of its 290 care homes up for sale, naming Knight Frank as the agent appointed to run the auction process, Bupa told Caring Times on October 21st that the reports were ‘market speculation’ and would make no further comment.
It has been reported that the decision to offer more than two-thirds of its care home portfolio for sale was made at a meeting of Bupa’s board held in September, with Bupa looking to sell the homes within the next 12 months. A source has been quoted as saying that as part of the move, Bupa’s care homes division would be split into two parts, called Lifestyle and Partnership, with 20,000 staff transferring from Bupa to the new owner once the sale … Read More »