Global real estate consultant Knight Frank advised on a record £12bn in healthcare deals in 2017.
In his spring market overview Knight Frank Head of Healthcare Julian Evans said occupancy rates rose for the fifth consecutive year in 2017, while average fee levels outstripped RPI for the fourth year running,
Julian said challenges such as staffing, the social care funding crisis and increases in the National Living Wage had failed to dampen investor interest in the sector.
Its record transaction year saw Knight Frank advise on HC-One’s acquisition of Bupa and Helen McArdle care homes, as well as deals involving Porthaven Care Homes and the Regard Group.
Julian said investment demand was at a 20-year high due to strong fundamentals.
Looking ahead, Knight Frank predicted continued strong interest from pension funds and domestic and international investors whose interest in the UK was being fuelled by the weak pound.
Julian said bed demand would continue to grow in 2018 with the care bed shortage predicted to rise to 149,000 by 2021 with almost 6,600 care homes at risk of closure (see UK faces £15bn care home replacement bill, Knight Frank says).