New Healthcare Market Review reveals elderly personal care sector creating exciting investment opportunities and defying Brexit

New Healthcare Market Review reveals elderly personal care sector creating exciting investment opportunities and defying Brexit

  • Personal care sector occupancy at 91.7% in H1 2016 (Colliers International)
  • Long-term stability and excellent prospects are a win with investors (Properties of the World)
  • Income up and costs down across personal care sector (Colliers International)

The newly released Colliers International Healthcare Market Review 2016 has provided the very latest insights into the healthcare property and business sector, revealing that the personal care sector performed well over the past year, with total income levels reaching a new high while costs have fallen.

Rising occupancy levels of personal care services for elderly people were behind the trend, with the elderly care sector seeing occupancy rates of 91.0% or higher for all types of provision in H1 2016.

Average weekly fees were also up for the personal care sector, rising to £536 per week in H1 2016 from £526 per week in H2 2015. At the same time, payroll costs fell from 51.0% of total revenue in H2 2015 to 50.7% in H1 2016 and non-payroll costs dropped from 17.1% to 17.0%.

Jean Liggett, Founder and Managing Director of Properties of the World, comments,

“The personal care sector is attracting keen interest from investors thanks to its long-term stability and excellent future prospects. The UK has an ageing population and thus healthcare properties are becoming an increasingly popular asset class.

“As the Colliers Healthcare Market Review points out, the statistical stability of such investments is incredibly appealing. The industry is growing and adapting to the changing needs of the population and investors are in a position to take full advantage of the new breed of provision that is coming online.”

Wagon’s Way near Sunderland, which is available for investment from £58,500, is representative of this new style of elderly care provision. The 58 bed, high quality, nursing and dementia specific care home is the latest offering from a developer that is meeting and exceeding Care Quality Commission (CQC) requirements across its extensive provision.

Already open and operational, Wagon’s Way provides a modern twist on vintage décor, along with a host of touches designed to make life easier and happier for residents, such as cherished photographs on key boxes by bedroom doors rather than impersonal (and easily forgettable) numbers.

The dual appeal to investors in developments such as Wagon’s Way lies in the profitability of the investment (circa 8% NET rental returns for 25 years) and in the ethical considerations. The innovative investment model means that everyone wins: the investor, the residents, their families, the community, the care professionals and the CQC. It’s investment that really does make a difference.

While the impact of the UK’s Brexit vote is still very fresh, the Healthcare Market Review certainly points to healthcare investments standing up well, particularly when compared with other sectors. The report concludes that, “the long-income prospect and underlying stability of demand remain intact.” As the report observes, the UK’s political maneuverings do not affect the infrastructure required to meet the needs of its ageing population, and therein lies the final piece of the puzzle, making healthcare sector investments one of the most attractive asset classes over the longer term.

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