HC-One puts care homes up for sale

Britain’s third largest care home operator, HC-One, is reported to have put around 70 homes up for sale for around £300 million.

Property Week magazine reports that HC-One’s landlords – Court Cavendish, Formation Capital and Safanad – have appointed agents to sell the homes in various  locations across the country. The assets make up about a quarter of HC-One’s 275-home portfolio.

The move is believed to be part of a long-term finance restructure for the joint venture owners, who will use the proceeds to pay down a debt of around £250 million. The homes will be sold on a sale-and-leaseback basis.

HC-One was formed in 2011 to take over operation of the third of Southern Cross homes that were owned by property investor NHP after the operator – then the largest in the UK – collapsed under £50 million of debt.

In 2014, NHP was acquired by Court Cavendish, the healthcare turnaround specialist, which already ran the management operation at HC-One, along with investors Formation Capital and Safanad for a reported £477 million. This deal included ownership of the 275 properties operated by HC-One.

The new owners pumped £100m into a refurbishment programme across the portfolio earlier this year, which saw some of the care homes get hair and beauty salons, games rooms and reminiscence rooms, which recreate a different era for the benefit of older residents.

The care sector is feeling the pinch as the new £7.20 an hour national living wage comes into force, increasing the salary bill for many providers. Last August, HC-One was one of five top care home operators to write to Chancellor George Osborne, warning that a major care home provider was likely to fail within the following one to two years because of the changes.

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