Target Information

Elevation Advisors LLP ("Elevation") has announced the initiation of a £53 million development facility in collaboration with MACC Care Group ("MACC"), a prominent operator in the elderly care sector. This funding, managed through Elevation’s credit joint venture ("Credit Fund"), aims to support the construction and lease-up of senior living assets. The facility specifically encompasses the development of three new facilities, each designed to offer high-quality care services with modern amenities.

The first facility is situated in Great Wyrley, South Staffordshire, featuring a state-of-the-art care home with 90 beds and 32 retirement living apartments. Construction is currently underway, with the care home anticipated to open in early 2025, while the apartments are expected to be completed in 2024. Meanwhile, funding has been allocated for two additional sites located in Brownhills and Shirley, West Midlands, which will incorporate 90 and 72 ensuite wet-room beds, respectively, with construction scheduled to begin in November 2024.

Industry Overview in the United Kingdom

The elderly care sector in the United Kingdom continues to expand as the aging population increases. Currently, the country grapples with a significant undersupply of senior living facilities, creating a pressing need for quality care homes. This demand is compounded by the rising number of individuals aged 65 and older, necessitating innovative solutions for long-term care and associated housing options.

As operators seek to enhance service offerings, there is an evident trend towards high-specification builds featuring modern technology and sustainability practices within the UK market. The integration of features such as wet-room facilities and ensuite options has become increasingly preferred among residents and families alike. This shift not only elevates the standard of living for the elderly but also meets the regulatory requirements set forth by health authorities.

The development of green and energy-efficient facilities is becoming a standard across the industry as providers adapt to changing environmental expectations. Facilities that achieve high ratings on the Energy Performance Certificate (EPC) and BREEAM Construction systems are now experiencing greater investor interest and public approval. As such, the UK's senior housing sector presents myriad opportunities for stakeholders willing to invest in sustainable and high-quality care solutions.

MACC, having successfully launched nine homes in six years, represents a growing trend in regional operators developing a niche market characterized by high-quality care. The firm’s commitment to sustainability is evident in its existing portfolio which predominantly holds high EPC ratings, aligning well with current market demands for responsible development.

Rationale Behind the Deal

The rationale for Elevation’s investment in MACC focuses on the growing demand for elderly care facilities amidst a severely undersupplied market. Elevation's partnership with MACC allows for the provision of innovative financing options that enable quality operators to expand their service offerings effectively. As demographics shift, this investment aims to capitalize on the increasing need for purpose-built accommodation in the sector.

Moreover, the strategic focus on developments that incorporate sustainable building practices aligns with investor interests and regulatory trends, ensuring that these projects not only meet current demands but are also future-proofed against evolving standards.

Investor Information

Elevation Advisors LLP is known for its strategic investments in real estate, particularly within the senior housing sector. By managing the Credit Fund in partnership with a leading institutional real estate investor, Elevation aims to provide necessary capital for the development and expansion of senior living accommodations. Their focus on innovation in financing positions them as a pivotal player in facilitating high-quality developments.

The Credit Fund has previously facilitated £125 million in loans for MACC, reflecting a strong track record of collaboration and support for the operator's growth trajectory. The ongoing partnership exemplifies Elevation's commitment to driving sustainable development within the sector while delivering returns to their investors.

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This investment can be considered a strong opportunity for Elevation given the pressing demand for quality elderly care facilities in the UK. The commitment to high EPC and BREEAM ratings for sustainable operations not only enhances the marketability of the developments but also aligns with growing public and governmental emphasis on environmental responsibility.

Furthermore, MACC’s proven track record in rapidly expanding its portfolio indicates strong management capabilities. The decision to fund further developments underlines the stability of this partnership and the continued confidence in MACC’s operational excellence.

As the elderly population continues to grow, the trend towards high-quality, purpose-built care accommodations will bolster MACC's stature within the industry. Given that all MACC's existing homes already hold high EPC ratings, the potential for these new developments to meet or exceed such standards further underscores the strategic foresight of this investment.

In conclusion, the collaboration between Elevation and MACC represents a compelling opportunity to address a critical market need while ensuring sustainable and responsible growth. This deal is likely to yield positive outcomes for both the investor and the elderly care sector, making it a prudent investment choice.

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