Nursing Home Sector Review

There is a reported shortfall of nursing homes beds in Ireland of up to 12,000

 

Nursing Home Sector Review

There is a reported shortfall of nursing homes beds in Ireland of up to 12,000

As a multi-asset class lender, Cullaun Capital is always keen to understand the detail of different sectors of the market. When we launched the business, we said that we recognised that “home” may mean different things at different stages of life.  While we are committed to supporting developers looking to construct much needed housing, we also made clear that we were keen to support other areas of the Irish development market.

We want to provide high quality support to anyone we work with and that means ensuring we fully understand the nature of different specific markets.  Therefore, when we started to look at the Nursing Home sector, we engaged BDO to provide a detailed sector analysis and worked closely with Brian McEnery and Brian Haugh who produced a high-quality report tailored for the needs of Cullaun Capital.

While any lender or operator will have their own views, there were some overall figures that we at Cullaun found extremely compelling;

Their findings include:

  • Ireland has an increasing ageing population which is generally forecast to rise materially over the next 30 years at both 65+ and 85+
  • Ireland has some 30,000 nursing home beds of which 24,000 are operated by the private sector and which are largely fragmented in terms of ownership
  • There is general acceptance of the need for additional supply of nursing home capacity with one report from 2018 suggesting a shortfall of the order of 12,000 beds
  • The “Fair Deal” system is generally viewed as working well and is not expected to change significantly, particularly as we are entering a period where receipts are expected
  • While the demand for Nursing Home beds is broad, there are forecast to be particularly strong requirements in Dublin and Cork and their surrounding areas
  • As the population ages and medical care improves, we need to find alternatives to hospital provision of non-acute care and Nursing Homes can – and must – be part of this

As a result of this review, Cullaun Capital made the decision to actively support the construction of new HIQA compliant Nursing Homes.  We were delighted to have the opportunity to work with Bartra Capital which had identified this need and were committing to develop multiple Nursing Homes over the medium term.

We worked closely with Bartra and BDO on two substantial Nursing Home projects and were pleased to close both loans on the same day in March.  They relate to a facility in Northwood which will deliver 118 beds in early 2020 and one in Beaumont opening later in 2020 near the existing hospital which at 221 beds will be the largest nursing home in Ireland.

Stephen Bell, Cullaun Capital CEO said “We see a significant need for new nursing homes to be built which meet HIQA standards and provide the patient dignity anyone would want for their own family member when the time comes.  We hope the two loans to Bartra will be the start of a much larger commitment and I am happy to say that as a multi-asset class lender we have the financial strength to support significant growth in this area”.

Head of Healthcare and Advisory at BDO, Brian McEnery commented “I welcome the entry of Cullaun Capital to the Healthcare space.  As a firm BDO is pleased to be an advisor to Cullaun and believe their capital offering will be valued by many healthcare developers and providers.”

Cullaun Capital are proud to support Bartra Capital with their development of two state-of-the-art nursing home facilities at Beaumont and Northwood

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