IN spite of the downturn in the domestic housing market, the care sector does not seem to share the public s suspension of confidence. Nor has investors enthusiasm for the sector been dampened by the current crisis in the financial markets, report leadin
IN spite of the downturn in the domestic housing market, the care sector does not seem to share the public's suspension of confidence.
Nor has investors' enthusiasm for the sector been dampened by the current crisis in the financial markets, report leading business agents Christie and Co. The leading care operators continue to compete aggressively for suitable acquisition opportunities, they said.
Rather than experiencing a slowdown in transactional activity, Christie's care team has actually reported an increase in the number of completions taking place in the first quarter of 2008, compared with the same period last year.
Robert Mellamphy, care negotiator at Christie's Ipswich office, said: "While it is likely that the current financial climate will dictate a slowdown, activity across the care sector during the first half of the year has continued to be robust and diverse - not only at a national and regional level, but also internationally.
"However, the instability in the financial markets has raised a number of issues for investors; such as the availability of debt, increases in the level of equity requirement and the need for a more comprehensive due diligence process - all of which creates uncertainty and therefore affects prices.
"Despite several care home owners looking to sell their businesses before the new capital gains tax charges came into effect on April 5, other operators have been exploring the possibility of developing and expanding their existing assets in order to increase provision," he said.
"Government funding has also been gradually improving over recent years, which has encouraged investors to move into the sector. With the market predicting that the number of people in the UK over the age of 60 will increase by as much as 37 per cent by 2031, the demographic profile alone is enough to drive ongoing demand for healthcare property assets.
"Demand continues to exceed supply for private businesses with strong cash flows and the increase in care home values over recent years has resulted in high levels of investor interest in the sector. While the market, especially in the UK, will need to adapt to be able to overcome the challenges ahead, we feel confident that the strength of the sector over the last seven years will mean that this potential 'crisis' remains only a correction.