A shortage of capacity amidst increasing demand means healthcare is an attractive asset class for investors, Knight Frank has said.
Head of Healthcare Julian Evans made the comments during the first day of Health Plus Care at London ExCeL.
Julian said: “The care home market is an amazing sector to go into because of the demand and supply issues although these provide operational problems for providers.”
The Knight Frank expert said there was a “global invasion” of investment coming into the sector from Asia Pacific, the Middle East, private equity, US REITs and UK specialist funds.
He said investors were attracted by long leases in the sector and the supply-demand issues which will see 20,000 beds lost by 2020.
On an operational level, Julian said the future looked grim for the providers up to 25 beds with the National Living Wage likely to put many of them out of business over the next five years.
He added that providers were increasingly looking outside the South East for new developments targeting the £850-1,000 fee paying bracket.
Julian highlighted the Midlands as an increasingly attractive area for private providers.