The average price of property in the care sector rose by 4.7%, according to the annual Business Outlook 2016 study published by real estate consultant Christie & Co.
The report looked at business property prices in business sectors ranging from hotels and pubs to care and retail.
The increase in average prices across all sectors was an encouraging 9.0% and Christie & Co predicts that the value of businesses across the medium term will continue to rise and outstrip pre-recession levels, in line with any increase in their profitability.
The care sector was the worst performer, and is the only area where average property prices are still below pre-recession levels.
Chris Day, global managing director of Christie & Co, says the care market is likely to lag other sectors again this year. “Though we expect values to rise in the medium term, there are still areas of uncertainty in several of our sectors caused by factors such as the National Living Wage. The Care market in particular is exhibiting some caution due to this announcement.”
David Rugg, Chairman of Christie & Co added: “As we start a new year, as an industry, we are
faced with a number of legislative processes which will have an impact on all of the sectors that Christie & Co covers. Whilst the implementation of the National Living Wage will undoubtedly create challenges within certain sectors, it would appear that most operators are proactively tackling it and drawing up inventive plans to limit the impact on their businesses.
“Relatively subdued volumes coming to the market in 2015 created a scarcity of assets in the private owner-operator market that further fuelled price growth, while continued low interest rates and an improved lending environment created an appetite to acquire. This disparity between supply and demand looks set to continue in 2016 alongside a gradual increase in single asset transactions.”
Average business property price rises in 2015 were:
Hotels: + 9.2%
Pubs: + 10.1%
Restaurants: + 9.9%
Care: + 4.7%
Retail: + 10.3%
Medical: + 10.8%*
*data relates to Pharmacy only