A nursing home boom. The age-old business of caring attracted a corporate cash pile of €600m in 2021. Source: The Sunday Times. (Fred says watch this space in Ireland. Bartra are carving out a nice niche and so are others). However, Fair Deal is lucrative and has kept many of these businesses substantially financed and now they are being sold off to investment companies. Note the word “investment”. The Europeans are buying up nursing homes at a phenomenol rate; why is it not discussed in our Dail; by our politicians and our media?

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A nursing home boom | Ireland | The Sunday Times

https://www.thetimes.co.uk › article › a-nursing-home-bo…

9 Jan 2022 — DIF Capital Partners, a Dutch investment fund, recently acquired Newpark Care Centre in north Dublin and Ashford House in Dun Laoghaire, and is …

A nursing home boom

The age-old business of caring attracted a corporate cash pile of €600m in 2021

Anne Heraty owns Trinity Care alongside Paul
                  Carroll
Anne Heraty owns Trinity Care alongside Paul Carroll

Brian Carey

Sunday January 09 2022, 12.01am GMT, The Sunday Times

Care rule changes to hit home
After a year of radical transformation, the nursing home sector is heading into a period of yet more upheaval and feverish corporate activity, says Cormac Megannety, senior director and head of CBRE Healthcare. According to CBRE Healthcare research, the value of transactions last year hit a record €600 million, and since the start of 2019 more than €1.1 billion has been spent on gaining a foothold in the sector.

Megannety, whose team advised on the roughly €100 million sale of Trinity Care, owned by recruitment pioneers Anne Heraty and Paul Carroll, says standards of care regulations could close smaller homes and take up to 7,000 beds out of the system. Meanwhile, the strategy for many large European groups rolling through the market here will subtly shift from buy-to-build to replenishing the care homes stock.

French investors lead invasion of nursing home sector

The big players got bigger. France’s Orpea Groupe cemented its position as the country’s leading owner-operator. It acquired Mervyn Smith’s First Care group (a deal also instigated by CBRE); the landmark 140-bed Belmont facility in Stillorgan, Co Dublin; the 103-bed Athlunkard House in Clare; the 74-bed Kilbrew in Ashbourne, Co Meath; and the last 50 per cent of the Brindley portfolio it did not own. Having entered the market in 2020 it now owns and operates 25 homes.

Carechoice, owned by Infravia, a French infrastructure fund, bought Newtownpark House in Blackrock, Co Dublin, plus Beaumont and Brookfield in Cork, and Elm Hall in Celbridge, Co Kildare. It has 14 homes and over 1,300 beds. Germany’s Immac, which owns the Beechfield group, has nabbed four homes in Dublin, Kildare, Carlow and Meath.

Overseas funds tackle growth
The market evolved last year with funds acquiring properties to lease to local and international operators. Belgian real estate fund Cofinimmo bought the Trinity Care portfolio, which it leased to DomusVi, a French operator. DomusVi has since bought Annabeg in south Dublin and Drakelands in Kilkenny. Aedifica, another Belgian fund, acquired two small groups, Signacare in the southeast and Virtue in south Dublin, then Bridhaven in Mallow, Co Cork, and the Altadore in Dublin. All are operated by Virtue Integrated Elder Care, which is headed by Cillian Willis, a former pro rugby player, and backed by French nursing home group Emera.

DIF Capital Partners, a Dutch investment fund, recently acquired Newpark Care Centre in north Dublin and Ashford House in Dun Laoghaire, and is seeking an operator. Interested parties could include French operator Vivalto, headed by ex-tennis player Guillaume Raoux. Last year it acquired Grace Healthcare, which runs seven homes. The biggest operator remains Irish: the Cardinal Capital-backed Mowlam Healthcare, with 27 homes.

Interest builds in development sites
CBRE’s Cormac Megannety says there has been a big uptick in interest in development. The French group Orpea has been “particularly active” seeking develoment sites, he says, and is on-site with a new scheme in Kilkenny. Belgium’s Aedficia has a big project under construction in Stepaside, Co Dublin, and has acquired three “ready to go” sites in the southeast from Whitebox Property group, with Mowlam Healthcare set to become operator on completion. Mowlam is developing a 150-bed care home at Ballyogan, south Dublin. Carechoice is developing a 143-bed home on Parnell Road in Dublin and has other developments and extensions in the pipeline.

“All new and existing participants have clear acquisition objectives for 2022 and beyond,” says Megannety, who adds that CBRE is advising “even more pan-European groups” sizing up the market. Why Ireland? The European interest is underpinned by the Fair Deal scheme, which effectively sees the state underwriting rates and high occupancy, particularly in newer and well-located homes, due to a shortage of beds in the system. Ireland also has an ageing population.

Hiqa puts squeeze on bed numbers
The bed shortage may get worse. Hiqa guidelines state 80 per cent of residents in a nursing home must be accommodated in single bedrooms, with a minimum size of 12.5 sq m and en suite facilities. Lifts have to be provided between floors, and residents must have adequate space outside of their bedrooms. Compliance could be problematic. “If twin beds are no longer allowed, we could lose over 7,000 beds nationally and we cannot afford that,” says Cormac Megannety, head of CBRE Healthcare.

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Almost half of Irish nursing homes have less than 50 beds. Older stock needs replacing. Foreign investors are likely to step up to the task.

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