New Care agrees £60m deal with Octopus
New Care, part of the McGoff Group, has sold three assets in the region as part of a £60m disposal to Octopus Healthcare, with Knight Frank advising.
Octopus is to acquire newly developed care homes incorporating around 300 beds across the Midlands and North West, with assets in Nottingham and Chester, already operational, to immediately be leased back to New Care which will continue to operate the facilities.
A further two properties, in Formby and Bramhall, will be acquired by the Octopus Healthcare Fund at practical completion. The Formby development is due for completion in spring 2019, with Bramhall being delivered towards the end of 2019, both developments being delivered by McGoff Construction.
The value of the deal breaks the previous record for the growing Octopus Healthcare Fund, which said it signals the move towards long-term partnerships being the model of choice for future investment in care homes.
Dominic Kay, chairman of New Care, said: “New Care’s relationship with McGoff Construction allows us to design and build bespoke care facilities that feature the very best specification and interior design and offer exceptional care services.
“In a similar way, we have established strong working relationships with both Knight Frank and Octopus Healthcare, both of which are commercial, pragmatic and a pleasure to deal with.”
Freddie Richards, investment director at Octopus Healthcare, said: “The Octopus Healthcare Fund has had a busy twelve months, having committed £198m into UK care homes since the fund was set up a year ago.
“This latest deal is particularly exciting as it demonstrates our partnership investment strategy in full swing. New Care’s experience in both care home development and care delivery is enviable and they are very straightforward to work with; they’re our kind of people.”
New Care, set up by McGoff in 2010, is in an expansionist mode as it seeks to make headway in a sector that is beset by aged, ill-equipped buildings and has struggled as an industry to cope with the impact of the National Living Wage. The business refinanced in April.
The company’s proposals have attracted some opposition, and in July New Care said it will submit a second application on a site in Wilmslow Road, Handforth, scaling back its plans. The developer’s plans for the Macdonald Hotel site in Lymm have also met with some resistance.
Knight Frank has predicted that the UK requires in excess of £15bn to upgrade existing beds in order to future-proof the industry, and that approximately 6,500 care homes are at risk of closure over the next five years.