Care market activity returned to pre-recession levels in 2017, according to specialist business property adviser, Christie & Co.
Average market prices rose by 6.1% in the year, according to Christie & Co’s Business Outlook 2018.
Richard Lunn, Managing Director – Care at Christie & Co, said: “Having achieved levels of activity across the sector on par with those achieved pre-recession, our healthcare business concluded the year remaining at the forefront of the marketplace with the highest number of transactions in several years.
“A surge of new development activity within the sector has driven improvement of the quality of estates and brought about a diversity of operators and investors seeking new opportunities, such as care villages and extra care schemes to supplement care.
“We can expect further investment from global investors seeking yield security in a low-interest environment. While this is likely to be followed by a separation between property and operating companies, the shift could also lead to unprecedented levels of PropCo transactions.”
Richard told CHP that Christie & Co had completed a number of disposals of non-core assets for Four Seasons, Bupa and Embrace during 2017.
The property advisor handled 400 homes transaction during the year.
Richard said that while there had been a decline in market interest from US REITs, there had been increasing interest from Asian funds and UK institutional investors seeking better returns in a low interest rate climate.
The property specialist said UK institutions were prepared to pay a more aggressive yield to take up tenancy agreements with care home providers.