Consolidation in the care home sector continues

Posted on July 1st, by editor in Caring Times. No Comments

By RICHARD LUNN, director and head of healthcare at Christie + Co

This year has continued to see vibrant activity in the care home sector, which should continue throughout 2007. While the volume of transactions has remained at a similar level to last year, the average sale price for individual care homes has risen to £1.63 million compared with £1.5 million in 2006.

Vendors have been enjoying a fabulous marketplace and it will continue to thrive. In the past 12 months, for instance, Christie + Co has seen an increase in demand for new-build sites and land for development.

This trend has been triggered by several factors. First, the lack of availability of quality existing care homes, particularly in the southeast of England, coupled with improved profitability has pushed up going-concern values.

In addition, stricter development regulations imposed by the Commission for Social Care Inspection (CSCI) have also increased operator interest in new-build. Standards for new-build homes are ahead of many existing care homes, meaning we are seeing the develo

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