Three of Ireland's best-known businessmen – JP McManus, John Magnier and Dermot Desmond – have sold Barchester Healthcare, Britain's largest private care home operator, to US real estate giant Welltower in a historic £5.2bn deal.
The transaction represents one of the largest health care acquisitions in British history and underlines the growing appeal of the UK social care market for foreign investors. Welltower, the world's largest real estate investment trust (REIT) specializing in healthcare assets, has confirmed it will retain Barchester's existing management team but the three billionaire shareholders will exit the business entirely.
Barchester operates 223 nursing homes and hospitals across the UK, providing 14,500 beds and employing more than 16,000 staff. Founded by Mike Parsons in 1992, the company has grown to become one of the UK's largest personal care operators with a strong presence in London and the South East.
McManus, 74, and Magnier, 77 – renowned for their success in global horse racing – along with Celtic FC shareholder Desmond, 75, have held their stake in Barchester for more than two decades through their Jersey-based investment vehicle, Grove Ltd.
The trio, who also co-own the Sandy Lane Hotel in Barbados, had sold the group to Australian infrastructure investor Macquarie for about £2.5 billion in 2019, but the deal fell apart amid Brexit uncertainty.
Their long-awaited exit now comes at a much higher valuation – more than double the 2019 offering – as rising care fees and growing demand from an aging population have whetted investors' appetite for health care real estate.
Confirming the deal, Barchester chief executive Dr Pete Calvelli said the sale would strengthen the company's ability to expand and innovate.
“Through our strategic partnership with Welltower and their significant and ongoing investment in their operating platform, we look forward to continuing to meaningfully enhance the lives of thousands of older adults not only by providing exceptional care but also by fostering environments rich in social and cognitive engagement,” he said.
Barchester's most recent results underline its strong performance. By December 2023, revenues are expected to rise 14 per cent to £871 million, while pre-tax profits will rise 23 per cent to £39 million.
Chairman John Coleman, former head of House of Fraser, has overseen the group's steady expansion and its reputation for operational stability – a key factor in attracting Welltower's bid.
The acquisition strengthens Welltower's position as the largest international investor in the UK aged care sector. Earlier this month, the US firm completed a separate £1.2bn purchase of care homes from HC-One, bringing its total UK investment to £6.4bn.
Welltower chief executive Shankha Mitra said the company plans to increase this figure further: “We are excited to expand our presence in the UK and continue to partner with the highest quality operators. Our commitment is long-term – we expect to increase our UK investment to $12 billion over the next five to ten years.”
The deal follows a record £3.1 billion in UK care home transactions last year, largely driven by US institutional investors. Analysts have pointed to the sector's resilience and strong rental growth, which contrasts with weak demand in the office and retail property markets.
According to Cushman & Wakefield, the average weekly care home fee is set to increase by 8.5 per cent in 2024, providing stable income potential for investors amid macroeconomic uncertainty.
Investment Minister Lord Stockwood welcomed the transaction, saying: “High quality care for our growing population is one of the most important challenges facing the Government. I am delighted to see a long-term and highly respected investor like Welltower continuing to bring its expertise, commitment and technology to the UK.”
Welltower's expansion marks a significant shift in ownership of the UK's aged care infrastructure from domestic operators to global capital. For investors, the attraction lies in the predictable rental yields, demographic demand and essential-service status of the area.
For Barchester, which is now entering a new chapter under US ownership, its focus will be on scaling its operations and investing in technology-based care models. The deal also signals the increasing financialisation of the UK care industry – where long-term returns, not just compassion, are increasingly shaping who owns the future of care.
Amy Ingham
Amy is a newly qualified journalist specializing in business journalism with responsibility for news content at Business Matters, the UK's largest print and online source of current business news.
