Bupa is refusing to confirm reports in UK broadsheets this month that it plans to sell 200 care homes in the UK.
The Sunday Times first reported early in September that accounting firm KPMG had been appointed to sell Bupa’s domiciliary care division, but this was followed weeks later by news that its care home portfolio would also be offloaded in an effort to shore up group profits.
In its trading statement for the first half of 2015, Bupa reported underlying profits for the group were down 10% for the six months ended 30 June 2015, despite revenue rising 3% to £1.38 billion.
The Financial Times reported on October 9 that property adviser Knight Frank has been retained to find a buyer for 200 Bupa care homes, quoting unnamed people familiar with the matter.
Neither Bupa nor Frank Knight would comment.
With local authority spending being squeezed, major groups are looking to restructure their portfolios in order to reduce dependence on council-funded residents and towards those that can fund their own care and accommodation.
The process may be turbulent, but the opportunity presented by an increasingly wealthy group of baby boomers entering the care home market over the coming decade is attracting rising interest from private care home groups and outside investors.
The Financial Times quotes a report from Knight Frank that says there are UK investors with war chests of £2 billion ready to invest in private British care homes, and potentially £5 billion more from overseas investors.
Care consultant LaingBuisson, in its latest report, Care of Older People, says that 90% of residential and nursing care services is now delivered by independent providers and that healthy profits can now only be made by operators focusing on self-pay residents in affluent areas of the country.