The private care market is open to consolidation from “stronger asset owners”, Impact Healthcare REIT has said in its first results since listing in March.
Since its IPO – one of the few this year that reached its capital raising target – the company has bought 57 care homes with 2,527 beds at an average net initial yield of 7.6%.
The company has invested the majority of the equity it raised and had no debt as of 30 June.
It said the market fundamentals for the sector are strong, driven by people living longer and the supply of beds falling by 20% between 1996 and 2016.
With 69% of the market held by operators with 15 homes, it said there will be scope to consolidate assets. Impact Healthcare itself owns 0.6% of the private care beds in the market.
Rupert Barclay, non-executive chairman of Impact Healthcare REIT, said: “Looking further ahead, the fundamentals of our market are strong, with growing demand for beds and limited supply. Care is an essential service and the government needs to relieve the pressure on adult social care and hospitals.
“Residential care homes will be an important part of the solution over the coming years and we see good prospects for the group.”
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