Moorfield Group has formed a partnership with UK-focused care home operator Allegra Care aiming initially to create a £125 million portfolio of between 15 and 20 modern nursing and dementia care homes.
Moorfield said it will build on its expertise and track record in the ‘beds’ sector. Initially, it will invest on behalf of Moorfield Real Estate Fund IV.
Allegra Care will originate and operate the assets and will also invest in the Partnership.
In a statement Moorfield said the partnership will apply strict investment criteria. The portfolio will comprise only, “modern, fit-for-purpose homes with large communal areas, in demographically supported locations across central and southern England”.
The partnership will seek operational assets and newly developed homes and said it is in advanced discussions on a number of acquisition opportunities.
Moorfield said the UK care home sector is valued at £16 billion and is underpinned in the long term by demographics. It said the number of people aged 85 or over in the UK is forecast to double to 3 million in the next 25 years. While the number of people of 75 years and over in the UK has increased by 10% since 2012, the number of elderly care beds has increased during the same period by just 1.5%.
According to Moorfield the partnership will extend its current approach to innovation in the residential sector, where it already invests in retirement living, build-to-rent property and student accommodation. Earlier this year Moorfield also entered the family home-for-rent sector with the acquisition of a portfolio of homes leased back to UK housebuilder Avant Homes.
“The nursing home sector is a logical extension to our demographically driven investment strategy, as we look to build on our successful track record of investing at the early stages across the ‘beds’ sectors,” said Moorfield Group CEO Marc Gilbard.
“The fundamentals for the UK’s elderly healthcare sector remain strong, and we expect the impact of the Covid-19 pandemic to be profound, accelerating the much needed delivery of fit-for-purpose homes, of which there is a chronic undersupply in the UK,” he added.