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O’Kane Commercial acquire Carlingford Lodge Care Home on behalf of Target Healthcare REIT

O’Kane Commercial acquire Carlingford Lodge Care Home on behalf of Target Healthcare REIT

Carlingford Lodge acquired

O’Kane Commercial acquire Carlingford Lodge Care Home on behalf of Target Healthcare REIT.

O’Kane Commercial have recently completed the acquisition of Carlingford Lodge Care Home on behalf of Target Healthcare REIT. Target are the only publicly listed specialist investor in UK care homes. The acquisition of the 74-bed care home in Warrenpoint, Northern Ireland  was valued at around £5.75 million, including acquisitions costs. The Purchase price represents an initial yield in excess of 7%.

The home, Carlingford Lodge, is operated by Amore Care, a subsidiary of Priory Group, which will retain the contract for a 30 year term under the new ownership arrangements.

The home opened in 2011 and comprises of 74 single bedrooms with full en suite bathrooms including wetroom showers. It has a number of large resident lounges and dining rooms as well as a hairdressing and beauty salon and enclosed garden.

Kenneth MacKenzie, managing partner of Target Advisers LLP, says: “We are delighted to announce the completion of this acquisition. This care home, operated by a tenant who is well known to us, adds another quality property to the group’s portfolio and increases our presence in Northern Ireland. We continue to work towards the timely deployment of the proceeds from our recent fundraise. To that end, we are progressing a number of additional opportunities and expect to make further announcements in relation to these in due course.”

John Flannelly, Investment Partner at Target Advisers LLP said ” Mark O’Kane’s sector knowledge and local contacts played an important role in assisting us to manage this transaction to a successful conclusion”

Article from HealthInvestor – Northern Exposure

Northern exposure

Northern Ireland is often overlooked as an area for investment in care, but the integrated model of care so many wish for in England is in place already in the region, finds Luke Cloherty

At first glance, it would seem the care sector in Northern Ireland is in some degree of peril. Independent Health &Care Providers (IHCP) – the care home and home care sector trade body in Northern Ireland – recently calculated that fees in Northern Ireland for nursing care are currently £85 per resident, per week below the fair price of the care. This is before the effect of the National Living Wage (NLW), which would need a further £30 per resident, per week.

Then in May 2015, it was announced that consultations would take place over the possible closure of 10 state-run residential care homes. However, in November 2015, financially-troubled care home provider Four Seasons Health Care announced it was to close seven care homes in Northern Ireland. This prompted health minister Simon Hamilton to ask the Health & Social Care Board – the commissioner in Northern Ireland –  to “halt and review” the consultation on state-owned care homes. “Some of these proposals to close some [state-run] homes were predicated on spare capacity within the independent sector,” Hamilton said. “When some capacity within the independent sector is being reduced, I think it’s only right and proper that we pause and reflect and carefully consider the implications.”

O’Kane Commercial director Mark O’Kane agrees that the care sector is struggling a little in Northern Ireland. “The major story in recent months has obviously been the Four Seasons closures,” he says. “They are the biggest operator in Northern Ireland and while three of the seven care homes were bought and kept going by local operators, four did still close.”

O’Kane feels the real difficulty in Northern Ireland lies in the lack of private pay patients offsetting local authority ones. “There’s just not the same level of affluence in Northern Ireland as there is in, say, the South East of England,” says O’Kane. “You have far less private pay patients in Northern Ireland than in other areas of the UK. Local authorities are much squeezed and providers can’t justify losing hand over fist. Therein is where the problems begin.”

Indeed a look at poverty and social exclusion in Northern Ireland suggests O’Kane’s thoughts that lack of affluence affecting private pay cross-subsidising are right. The Joseph Rowntree Foundation’s (JRF) recent document ‘Monitoring Poverty and Social Exclusion in 2016 Northern Ireland’ finds that Northern Ireland has lower average pay than Great Britain. In 2015, the median weekly pay in Northern Ireland was £382, compared with £427 in Great Britain.

Another issue is that Northern Ireland has a fixed regional tariff, which is set by the Health & Social Care Board. It does not allow trusts the flexibility to recognise the different costs of care provision according to the complexity of resident need. Care providers who care for people with high levels of dependency, such as those requiring specialised dementia care, complex nursing care and end of life care, receive no differential.

There is also a regulatory requirement that “35% of all staff must be registered nurses in a care home with even one patient requiring nursing in Northern Ireland” an unnamed source says. “This requirement, combined with a national shortage of nurses, often means care homes outsource to more expensive agency nurses. The staffing costs of a typical mixed nursing and residential home are thus far higher in Northern Ireland than elsewhere in the UK.”

Moreover, Northern Ireland is often forgotten in political commentary. For instance, even the term ‘Brexit’ fails to actually address the state’s existence in the EU referendum debate. ‘Brexit’, or should I say, ‘Ukexit’, could have a major impact on care in the region though. For starters, there is the obvious point that Northern Ireland shares a border with the Republic of Ireland – an EU and Schengen member. O’ Kane notes that much trade is done with the Republic in general and that, particularly in regions that border the Republic, such as Derry/Londonderry and the West of County Tyrone, the situation could cause lots of problems, particularly with the current ‘soft’ border between the two. This could impact on government profits and thus on funding to the health and social care sector.

JLL’s Gary Watson thinks the impact would be minimal though. “The impact on day-to-day activities of most operators is unlikely to be impacted too greatly, possibly with the exception of added visa/work permit issues, likely to arise for the considerable non-national workforce (EU and non-EU) and who make up significant proportions of the health and social care workforce (private, voluntary and public),” he says.

Indeed, negatives aside, there are positives to Northern Ireland as an area for investment. The very existence of the Health & Social Care Board is remarkable. It is a genuinely integrated body, which derives funding from the Northern Ireland Executive (currently £4 billion per annum) and works with both health and social care trusts in the region. Much is being made in England of the decision in Manchester to devolve responsibility for the health and social care budget to a new Greater Manchester partnership, but one need only to look to Northern Ireland to see such a system already in place. It is slightly indicative of the general British view to not look across the water to see what joined-up care would look like, but instead wait for it to happen in a major English city.

There is also a lot of room for consolidation. Four Seasons is by far and away the largest independent care provider in Northern Ireland with 63 care homes in total. Thereafter, Runwood Homes – with seven homes – is the second largest operator. From then, it’s the usual mom and pop operators. Watson feels “there is a real case for investment in, and consolidation of, the existing stock in Northern Ireland”. “By operators and investors demonstrating commitment to and investment in the sector, the demographic demands and current inequities in health outcomes for the Northern Ireland population can only be delivered and improved,” he adds. For example, tariff negotiations could be become easier and, as the market already commissions on an integrated basis, that “should mean more immediate prospects for greater and innovative collaborative initiatives, resulting in greater financial efficiencies and better patient outcomes”.

The fact is, though, investors tend to be put off by uncertainty in the main and flat turned off by that which they do not know. With Four Seasons floundering financially and everybody waiting to see whether it is to become the new Southern Cross the Northern Irish market otherwise mostly made up of mom and pop ventures, investors will be reluctant to invest. As the push from the Northern Irish government to close some state-run homes suggests though, there is commissioner appetite for more independent providers to enter the space, if anyone is brave enough to take the plunge.

Four Seasons’ Q1 results ‘ahead of expectations’

Four Seasons’ Q1 results ‘ahead of expectations’

The UK’s largest care home provider Four Seasons Health Care Group has announced increases in revenue and ebitda in financial results for the three months ended 31 March 2016.

Ebitda increased at the financially troubled firm by 67.3% on the previous quarter to £9.2 million (Q4 2015: £5.5 million) and 5.7% on the first quarter of last year (Q1 2015: £8.7 million). Revenue jumped 4.3% above the previous year’s first quarter to £171 million (Q1 2015: £164 million).

Occupancy across the group’s care homes in the quarter increased 2.2% on Q4 2015 to 87.5%, while it ended Q1 2016 with over £50 million of cash, “consistent” with cash in the preceding three quarters.

The group’s results statement said it will “continue to sell assets that are loss making, underperforming or not core to the business”.

Four Seasons chairman Robbie Barr said: “Performance for the first quarter of 2016 was ahead of expectations. The group has benefitted from continuing positive momentum that began towards the end of 2015, both in terms of further improvements in the group’s quality and stronger operational and financial performance.”

Earlier this year, Four Seasons posted disappointing results for the financial year ended 31 December 2015. In those results, ebitda for the year was down 38.7% to £38.7 million (2014: £63.1 million), while gross profit was down 31.1% to £51.1 million (2014: £74.2 million).

The provider’s future has been the subject of intense speculation in recent times with ratings agency Moody’s downgrading its bonds’ value further into junk status in 2015. Moody also added that the firm was in danger of running out of cash by June 2016.

O’Kane Commercial shortlisted for HealthInvestor Awards 2016

O’Kane Commercial are delighted to announce that we have been shortlisted as finalists for the HealthInvestor Awards 2016. O’Kane Commercial have been nominated in the Property consultants of the year – property services section.

Details of the Event and Finalists are available at

The HealthInvestor Awards are the most prestigious and well-attended awards in the healthcare sector and not only promotes excellence but recognise innovation in the sector. The finalists’ entries will now be passed to an independent judging panel, who will select a winner in each category. The winners will be announced at a black-tie dinner at the Grosvenor House Hotel, Park Lane, on Wednesday 15 June.

O’Kane Commercial sell Care Home Investment

O’Kane Commercial have recently completed the sale of a 65 bed modern care home known as Weavers House, Co. Tyrone. The sale was conducted on behalf of a local investor and the home was purchased by the existing tenant/operator, Runwood Homes.

O’Kane Commercial acquire Oakridge Care Home

O’Kane Commercial have recently acquired Oakridge Care Home in Ballynahinch on behalf of local care group Spa Nursing Homes. Oakridge Care Home is a 58 bed home that was earmarked for closure by its previous owner in November 2015. The new owners intend to continue to operate the home and undertake a refurbishment programme.

O’Kane Commercial acquire Antrim Care Home on behalf of Hutchinson Homes

O’Kane Commercial are delighted to announce the acquisition of Antrim Care Home in Antrim on behalf of Hutchinson Homes. The Hutchinson Care Homes group of Care Homes already includes Massereene Manor and Clonlee in Antrim, Glenkeen House and Drummaul House in Randalstown and Ballyclare and Clareview in Ballyclare and have been operating successfully for over twenty years. Hutchinson Care Homes Directors Janet Montgomery and Naomi Carey will be taking over the running of Antrim Care Home, with an assurance that they will continue to provide the award winning care that can be seen across the six other Hutchinson Care Homes.

Naomi Carey, Director of Hutchinson Care Homes, added;

“We are delighted to acquire this additional Nursing Home in Antrim which fit perfectly with our ongoing business development for Hutchinson Care Homes. We would like to take this opportunity to thank O’Kane Commercial for their help during the completion of this acquisition. On behalf of everyone at Hutchinson Care Homes I would reassure all residents, family, staff and friends that we are open for business immediately and this will be a seamless transition as we move this Nursing Home forward under the Hutchinson Care Homes brand, and Antrim Care home will continue to progress and develop under our guidance as we look forward to a positive future together.”

O’Kane Commercial sell Care Home in Jordanstown

O’Kane Commercial are delighted to announce the sale of a Part-built 72 bed Care Home, with planning for 12 Assisted-Living apartments at Wood Green, Jordanstown. The property was purchased by a local developer, who intend to complete the construction in 2016. The care home will be operated by an established local care home group.

Cerberus wins Ulster Bank’s giant Project Aran and NAB’s Project Henrico

Cerberus Capital Management has won Ulster Bank’s giant Project Aran non-performing loan portfolio and National Australia Bank’s Project Henrico, completing a sweep of four major commercial real estate (CRE) loan portfolio wins in the last week.

Royal Bank of Scotland Group, Ulster Bank’s parent company, has announced this morning that Cerberus has paid £1.1bn (€1.38bn) for the Project Aran, which had an unpaid loan balance of €5.6bn and gross liabilities of £4.8bn (€6bn).

Cerberus and RBS signed this deal in the early hours of this morning, fending off still competition from Lone Star and a consortium comprised of CarVal Investors, Goldman Sachs’ special situations fund and Apollo Global Management.

Project Aran was comprised of approximately 1,300 borrower groups, over 6,200 loans with around 5,400 properties. More than 75% by loan balance is secured by Irish assets and about 20% in Northern Ireland, with more than 90% of the loan portfolio in default.

RBS said in the statement  that the carrying value of the loans is c.£1bn and generated a loss of £0.8bn, principally impairment provisions, in the year to 31 December 2013.

The statement continued: “The transaction, which represents RWA equivalent of c£1.2bn as at 30 September 2014, is part of the continued reduction of assets in its RBS Capital Resolution division and is in line with the bank’s plan to strengthen its capital position and reduce higher risk exposures.”

Completion is expected in the first quarter of 2015.  Eastdil Secured sold Project Aran on RBS’ behalf.

Project Aran was upsized from an initial circa €1.7bn portfolio, back in October.

Cerberus has also paid around £950m for Project Henrico, NAB’s second portfolio of UK non-performing CRE loans from.

Project Henrico – comprised of 1,300 borrower groups and 5,400 properties throughout the UK – had a nominal value of £1.2bn, implying a discount of 21%.

CoStar News revealed last week that Cerberus, PIMCO and CarVal Investors were exclusively invited by NAB to bid on the bank’s Project Henrico portfolio as the three finalists on the Project Chestnut UK non-performing loan sale which traded to Cerberus for £485m, as revealed by CoStar News.

As a result of the Project Henrico sale, a small gain is expected to be recognised in NAB’s March 2015 half year accounts, and an estimated £127m of capital will be released for the NAB Group when the transaction is settled.

The Project Henrico loans are mainly defaulted, watch and high loan-to-value loans, with the sale reducing the higher risk loans in the portfolio by 93%.

NAB Group Chief Executive Andrew Thorburn said NAB had accelerated the run-off of the NAB UK CRE portfolio, with the great majority of the remaining non-performing loans being sold.

“This is an important step forward, effectively bringing closure to one of our legacy positions. The sale of these higher risk loans in the NAB UK CRE portfolio is another important milestone in our strategy of reducing our low returning legacy assets and sharpening our focus on our core Australian and New Zealand franchises,” Mr Thorburn said.

“Pleasingly the remaining NAB UK CRE loans are largely strong performing loans, and we will look at other options to manage this small remaining portfolio.”

Morgan Stanley advised NAB on the sale of Project Henrico.

Cerberus, whose European real estate division is headed by managing director Ron Rawald, last week won Nationwide’s Project Carlisle, paying just above £680m.

Also last week, Cerberus won a portfolio of Denmark non-performing loans – dubbed Project Mermaid – with a face value of DKK 7.5bn (circa €1bn) from Finansiel Stabilitet, the country’s bad bank.

In April, Cerberus won NAMA’s loan book of Northern Irish property loans, dubbed Project Eagle, paying around £1.2bn for the £4.5bn nominally valued loan portfolio.

Source: CoStar Finance


Northern Ireland house prices rise by 4.5% say ONS

House prices in Northern Ireland rose by 4.5% in the year to October, according to the Office for National Statistics (ONS).

The UK average rise was 10.4% but that was skewed by a rise of over 17% in London.

The ONS index suggests the price of a typical house in Northern Ireland is £137,000, comparable to the level in mid-2005.

The index is based on data from mortgage completions.

It shows that prices in Northern Ireland have increased, on an annual basis, in 14 of the last 16 months.

The biggest rises were in August and September of this year.

Source: BBC News Northern Ireland