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Who Cares?

10th January 2020

The residential care home sector is a small part of the commercial property market, but it is well placed to become a significant seam of business for property agents and job creation in the 2020’s and an influence on local commercial property markets in Kent and Medway.

The residential care home sector is a small part of the commercial property market, but it is well placed to become a significant stream of business for property agents and job creation in the 2020s and an influence on local commercial property markets in Kent and Medway.

The sector is fragmented, the largest five operators hold just 13% of the available beds according to Savills. While they have the largest bed capacity, they have failed to consolidate their position and face legacy issues with ageing stock. The big five all operate more than 7,000 beds nationally and include HC-One, Four Seasons, Barchester, Bupa and Care UK.

Most growth is coming from the next twenty five operators. The upper-tier of these manage between 3,000–6,000 beds and the next tier of mid-sized run around and 1,500–3,000 beds.

Overall, stock is growing slower than needed. Across the UK, the number of beds only increased by 0.9% between 2014 and 2019, while the population aged 85+ grew by 9.1%. So, with an ageing population and a large proportion of facilities requiring modernisation, there is a clear need for more supply nationally and in Kent.

With ongoing economic uncertainty and rising costs, care homes are predicted to remain a compelling asset for investors seeking to establish a healthy balance between risk and return – simply because demand is outstripping supply. The individuals in need of nursing homes or residential homes come from a fast-growing demographic. Demand is set to increase by 150% over the next 4 years according to the Office of National Statistics (ONS).

The ONS predicts that around a fifth of the UK’s population will be over the age of 65 by 2027, and this is set against the backdrop where local government is struggling to keep up with current demand for elderly care and accommodation provision.

The ageing population’s assets provide an opportunity for luxury care home investments as people are retiring at a later age and therefore have more money to invest in their retirement living. Luxury retirement care homes are also fast becoming a preferred choice amongst the elderly and could be an alternative investment option to consider.

Care homes can represent a hands-off investment so have become increasingly popular with overseas investors, mainly because they are fully-managed and pay regular income. Suitable sites for residential care sites are mainly in town centres or in villages which have good local facilities and amenities. Edge of villages and towns work well only if there is good access to the road network for staff. The property’s footprint is usually about 1 acre.

Operators regularly identify care homes that are in need of refurbishment, improvement, but can equally chose sites that are already performing adequately. Suitable properties may have been used for some institutional or communal purpose. Former country manor-style residences can also suit the purpose. We have investors that are looking for sites they can develop from the ground up, or vacant sites that can be developed.

You can help us increase care provision in our region. Reach out to your clients and use your imagination for sites that could be converted to care spaces or luxury retirement living.

We need a healthy pipeline of sites where staff can easily get to work. Where do you know in Kent and Medway that would make a great place for a new care home?

The sector is fragmented, the largest five operators hold just 13% of the available beds according to Savills. While they have the largest bed capacity, they have failed to consolidate their position and face legacy issues with ageing stock. The big five all operate more than 7,000 beds nationally and include HC-One, Four Seasons, Barchester, Bupa and Care UK.

Most growth is coming from the next twenty five operators. The upper-tier of these manage between 3,000–6,000 beds and the next tier of mid-sized run around and 1,500–3,000 beds.

Overall, stock is growing slower than need. Across the UK, the number of beds only increased by 0.9% between 2014 and 2019, while the population aged 85+ grew by 9.1%. So, with an ageing population and a large proportion of facilities requiring modernisation, there is a clear need for more supply nationally and in Kent.

With ongoing economic uncertainty and rising costs, care homes are predicted to remain a compelling asset for investors seeking to establish a healthy balance between risk and return – simply because demand is outstripping supply. The individuals in need of nursing homes or residential homes come from a fast-growing demographic. Demand is set to increase by 150% over the next 4 years according to the Office of National Statistics (OFT).

The ONS predicts that around a fifth of the UK’s population will be over the age of 65 by 2027, and this is set against the backdrop where local government is struggling to keep up with current demand for elderly care and accommodation provision.

The ageing population’s assets provide an opportunity for luxury care home investments as people are retiring at a later age and therefore have more money to invest in their retirement living. Luxury retirement care homes are also fast becoming a preferred choice amongst the elderly and could be an alternative investment option to consider.

Care homes can represent a hands-off investment so have become increasingly popular with overseas investors, mainly because they are fully-managed and pay regular income. Suitable for residential care sites are mainly in town centres or in villages which have good local facilities and amenities. Edge of villages and towns work well only if there is good access to the road network for staff access. The property’s footprint is usually about 1 acre.

Operators regularly identify care homes that are in need of refurbishment, improvement, but can equally chose sites that are already performing adequately. Suitable properties may have been used for some institutional or communal purpose. Former country manor-style residences can also suit the purpose. We have investors that are looking for sites they can develop from the ground up, or vacant sites that can be developed.

You can help us increase care provision and create in our region. Reach out to your clients and use your imagination for sites that could be converted to care spaces or luxury retirement living.

We need a healthy pipeline of sites where staff can easily get to work. Where do you know in Kent and Medway that would make a great place for a new care home?

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