Signature Senior Lifestyle is celebrating its 10th anniversary this year. In a rare interview, the company’s managing director Aidan Roche spoke to Care Home Professional’s Rob Corder about how the company has redefined luxury lifestyle for care home residents, and his plans to double the size of the company’s estate in the affluent outer London commuter belt.
Care Home Professional: How is your pipeline looking for new homes in the coming few years?
Aidan Roche: If we get 2-3 new schemes away each year, then that is a controllable pace of growth. This year there is nothing opening, we are not cutting the ribbon on any new homes, but in 2017-18, we are opening 5-6 new homes. It tends to average at 2-2.5 homes per year that we open.
That is the model. These types of sites are difficult to find, they are difficult to acquire, it is a difficult planning journey. But if all that comes together, the final product has a wow factor.
CHP: How would you describe the neighbourhood around here at Coombe Hill Manor (Kingston Upon Thames), and how typical is this location for Signature?
AR: You are ten miles from Central London, you are well within the M25, you are next door to the Coombe Hill Estate. If you were to plot the demographics for this particular site, you will find that within a 20 minute drive time around here, the average price of a detached home is not far off a million pounds. So the catchment and the depth of the demographic is incredibly compelling.
In fact, this is such a deep market here that we would actually consider building a second Signature residence here. Given the lease performance of this particular home and the demographic that I just described.
CHP: Signature is celebrating its 10th anniversary this year. Tell me a little bit about your history.
AR: We initially started in 2006 with private equity backers. I was there from day one as finance director working very closely with the private equity guys. We acquired two homes when we set up the NewCo Signature business. One was in Sheffield, it is actually a domiciliary care operation. One was a nursing home in Kent that we have subsequently demolished and rebuilt. The model was always to concentrate on the premium end of the market in areas around the M25.
We set the business up in 2006. We had a dip in 2007/8 when we had the financial/property crash. Then, as we came out of that, we raised a lot of institutional equity in 2010/11. That effectively funded the development of eight premium care homes around the South-East.
Of the eight sites that we received funding for when we raised our institutional funding in 2010/11, we have six properties that are now open, and we have another two that will come on stream next year.
Plus, we have an in-house development and construction team who are site-finding all the time around the markets that we want to be in. Right now our pipeline is relatively healthy; our funding is in a good place. But everyone in this marketplace, in these areas, is scrapping for the same sites. That is the challenge.
CHP: Who are your investors?
AR: Some are institutional, representing a range of pension plans. Some like to remain anonymous. Some of our properties are owned by an American healthcare REIT (Real Estate Investment Trust). We have no end of interest from institutional equity people, who are now looking at the whole senior living sector, particularly in the South-East, as a recognised asset class with an attractive yield. It is very compelling for them at the moment.
CHP: Would you say you could dramatically accelerate growth if you could find the right sites for new homes? It sounds like there is no shortage of funding available?