More than a third of care operators expect business recovery within the year, according to specialist business property adviser, Christie & Co.
In its annual Business Outlook report, Business Outlook 2021: Review. Realign. Recover, Christie & Co noted the resilience of the sector despite a reduction in average occupancy levels to 80% due to the tragic loss of residents to COVID-19 and numerous financial and operational challenges, including sourcing PPE and managing staff absences due to sickness or self-isolation.
Richard Lunn, Managing Director at Christie & Co, said: “Operators have shown their resilience and fortitude during this pandemic, and that confidence has been echoed by investors who continue to seek out the sector in growing numbers. Despite the challenges, we believe the focus on care over the last year will highlight the demand and opportunities for quality operators and businesses going forward.”
In its survey of care operators, Christie & Co found that 93% had been impacted by COVID-19 with almost half expecting it will take between one and three years for the sector to recover, however, 37.7% expected the recovery within a year.
More than a third (35.5%) said they were planning on selling their business or some assets in 2021 and 29% indicated they intended to acquire assets.
The report’s Price Index, predicted a negative price movement for the first time since 2009, however, Christie & Co said this was due to a reduction in trading performance rather than demand which remained strong.
Of respondents surveyed, 43% said prices would stay the same in 2021, 20% predicted an increase and 37% said they would decrease.
In its market predictions for the year ahead, Christie & Co said there will be an increase in activity as a result of paused portfolio activity in 2020 along with new deals.
Occupancy levels are expected to recover with increased referrals as vaccination and testing programmes are rolled out during Q1.
Interest from overseas capital is forecast to rise with European investors increasingly active.
Development activity for care homes and extra care/housing with care is predicted to increase “at pace”.
Christie & Co concluded: “In summary, whilst the third national lockdown will create some challenges, there is equally very positive news relating to the vaccine roll-out. As we get to Easter and during H2, we anticipate a steady recovery in trading performance coupled with a notable increase in transactional volumes and a continued level of strong development activity.”