Profit margins slipped in the care homes sector during the uncertainty surrounding Southern Cross’s future in H1.
Operating profit margins for care home operators slipped to 30% in the six months to 30 June, from 30.9% in H1 and H2 2010, according to Colliers International.
The agent’s latest care homes review also revealed that occupancy rates had dropped to 90% in the first half, down from 91% in H2 2010 .
Walter Boettcher, director, research and forecasting at Colliers, said: “The last half year has seen very few large investment deals, with the impact and publicity surrounding the demise of Southern Cross, certainly having an adverse effect on the market.”
Average weekly rents in H1 increased 3% to £591.50, up from £574 in the previous six months. However, if the impact of inflation is excluded, there was an erosion of fee levels by around 6%.
joanna.bourke@estatesgazette.com
