St HELENS CARE CENTRE

CPL is proposing to develop a 78-bed care home in the Ravenhead area of St Helens. The site was optioned in June 2022 and a full planning application was submitted to St Helens BC on 21 July 2022.

POPULATION: The population of St Helens is 177,000 (source UK Census 2021) – comparable to the population of Bedford or Basingstoke;

SITE: On a brownfield site in the Ravenhead area of St Helens. Site area of 1.74 acres, care home constructed over three floors. The site overlooks the former Pilkington Glass international headquarters, park, and lake.

Control: The site was optioned by CPL  on 16 June 2022 for 3 years with an exercise price of £1.15m.

Market Analysis: The leading social care consultancy, Carterwood has been appointed to report on the care market in St Helens. In brief, the key findings are:-

A 1021 bed shortfall in the market standard of ensuite wet rooms. This takes into account all consented beds – including the other recently consented care home; Fees of up to £1259 /bed/week are being achieved – HC-One;

Average house price is used as the benchmark by which to establish wealth and, hence ability to afford care fees in modern purpose-built care homes to the most modern standards including ensuite wet rooms – fees of approximately +£1300/wk. St Helens presents some difficulties in using this methodology. This is because average house prices to the east and south of the Ravenhead are low – a typical terrace property might be £105,000 (source Rightmove). However, the Ravenhead site – postcode “WA10 3” - sits on the edge of much wealthier parts of St Helens, to the west and north of the town with the average house price in adjoining “WA10 4” being £231,000 and in “WA10 5” being £244,000. 

 The 3 bedroom semi-detached house shown above is typical of “WA10 4”, and is within 650m of the Ravenhead site with an asking price of £295,000 (source Rightmove: April 2022). At £295,000 for a 3 bed semi-detached house this represents 110% of the national average house price of £269,098 for a semi-detached property (source HM Land Registry).

Only 10% of all beds in St Helens have ensuite – UK average is 17.2%. No existing care home in St Helens has wetroom facility. This reflects the poor quality and under provision of the care home estate;

There are no specialist dementia care beds for medium/high dependency in St Helens;

Research indicates that there are only two existing and planned care homes in St Helens that will be viable in the short and medium term. Criteria for the viability measure are that the home is purpose built, +40 beds with full ensuite bedroom, not necessarily ensuite wetroom standard, as a minimum.

Other Care Home Developments: The only other planned care home development is a home of 66 beds by a private care home development company. This care home has been consented in the last few weeks. From CPL’s perspective this development is not seen as direct competition to the Ravenhead site as it is 1.4 miles away on the other side of St Helens. We believe that these two planned developments will show to commissioners and, most importantly, the relatives of adults in care what excellence in care and physical environment can achieve. The creation of a new upper level of “state of the art” care homes will drag the quality of the whole social care market in St Helens upwards as the worst homes fall away being unable to compete.

Planning: The planning application for the care home was made on 21 July 2022 with specialist care home architect ADG having prepared the suite of drawing and reports for the application  decided to split the project into two parts for planning purposes, the care home and the assisted living apartments. The logic being that the planning fee for one is lower and, more importantly if planners have reservation about the assisted living units it does not drag the care home down to refusal.

Land to the south of the proposed care home development is in CPL’s control and forms the site of the 28 no assisted living apartments 

Development: On grant of planning consent CPL has an opportunity to either:

1) Sell the site with the benefit of planning consent for a 78-bed care home for a “Flip Profit” of £2.08m; 

2)  Work with our care contractor building partner, Lawrence Baker, to build the project out for an identified care provider – in this scenario, CPL would make the Flip Profit on the land and a small profit on construction.

3)  As 2) above, but also arranging development funding – in this case the identified care provider enters into a 35-year commercial lease on the completed care home with rent increasing by RPI annually. The table below sets out the development surplus under this s

The Development Value of £2,92m is for the care home only to which must be added the value of the assisted living site. On very cautious estimates of the selling price of assisted living apartments in St Helens a land value of £30k/plot, £840k is readily achievable. The share of the option fee is £200k and thus the net value of the assisted living site with the benefit of planning consent for 28 apartments is £680k.

The total value of the site with care home developed under a forward-funded institutional lease plus the sale of the assisted living site would generate a surplus to CPL of £3.60m.

Clearly, the forward-funded development route with a 35-year institutional lease to the operator combined with the straightforward sale of the assisted living site generates the best return for CPL, through its SPV, of £3.6m compared to the flip profit on the land 

CLP is now seeking £30,000 to complete the remaining planning application reports to take advantage of the planning gains. 

Remaining reports: Time to complete reports: 2-3 weeks to prepare all the reports

Ground investigation report £15k+ 

Coal mining report

Update Drainage report

Update Landscaping 

Update Tree Report 

Update Transport 

Update Heritage Report 

10% Contingency 

Costs

£1.1m for the option agreement

£340,000 Sports England (Bowls pitch currently on site)

Total investment to date £100,000

£40k to complete reports

Total Costs: 1,553,000

Exit: Option holders will sell on approval of the planning application. 

Revenue

No. of Bedrooms 78

The sale price per Bedspace £25,650

Total sale value £2,000,700

Profits

Total Costs: 1,5430,00

Total Revenue: £2,000,700

Total Profit: £457,700

50% share of profits £228,850 

Investment Gain 198,850

ROI 662.83

Annualized ROI 344.70%