Care Market Insight: Scotland
Martin Daw, Senior Director at Christie & Co shares his insight into the care market in Scotland.
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The care market in Scotland continues to perform well, with a range of opportunities available - from older converted homes to the latest turnkey stock - and the usual buyer hotspots being central Scotland and affluent towns and cities.
We are seeing an increased amount of distressed stock and formal administration sales which are attracting interest where the market senses the opportunity to buy low and add value, and there are also sizable group opportunities confidentially testing the market.
Challenges
While there was a pickup in occupancy last year, workforce challenges remain, coupled with ongoing operational costs.
New guidelines published by the Care Inspectorate in March 2022 meant many homes did not meet the standards of the new care home design guidelines, and re-registration of older homes met more resistance than in previous years. These challenging and rigorous inspections appear to be shifting the quality grades of the sector backwards.
What to expect this year
Headlines will continue to be dominated by operational challenges, and more homes will close under pressure from moratoriums imposed by the Care Inspectorate and ongoing financial challenges.
For the first time since its conception, members have rejected the National Care Home Contract rate proposed for 2023. With a minimal counter proposal from COSLA, it’s likely to be rejected again. This is significant and could see the demise of the NCHC and the market return to local commissioning.
Despite these headwinds, appetite remains for quality care businesses across Scotland, and our pipeline suggests we will see more individual homes and groups conclude in the first half of 2023.
To find out more about the care market in Scotland, contact Martin Daw: martin.daw@christie.com / +44 7764 241 280