Care property prices rose by 5% in 2016 as the sector continued the positive trend of the past three years, Christie & Co has said.
In its Business Outlook 2017 report, the specialist business property advisor said funding and staffing will remain the most critical issues facing the sector.
Care property prices have increased by a compound annual growth rate of 6.5% over the past three years after declining by 1.1% in 2013.
Richard Lunn, managing director Care, told Care Home Professional he expected 2017 to be a “busy year” with increasing sales activity reflecting stress on providers from the National Living Wage and funding issues.
Richard said: “Sales are being driven by owners not having the capital to invest in their services as well as by aggressive regulation.
“Some homes are also simply coming to their natural end with private equity coming out.”
Richard added that some “churn” had been seen as a result of corporate owners entering regional markets, particularly in the wealthy south.
“The trend of consolidation we have seen over the past decade and a half has continued,” Richard said.
“Many operators when faced with the twin challenges of reduced occupancy and inability to recruit nursing staff, have simply closed their services or repositioned them as residential care services.
“While economies of scale are a benefit to the larger providers there remains room for good regional providers within micro markets,” Richard added. “Providers are only as good as their management.”
To read the full report, click here.