Refit and refurbishment of Chestnut Lodge brings much needed quality care to communities in West Yorkshire

As our population ages, one of the big challenges we face in the UK is how to provide enough quality care. The number of people aged over 85 who need 24-hour care is set to double by 2035. Many of these people are living with complex long-term conditions such as dementia.

Despite growing demand, care home bed availability in the UK reached its lowest point in a decade in 2023. In parts of Yorkshire, availability is some of the lowest in the country.

A key part of our portfolio

Care homes are one of the asset classes to which we commit capital in our asset-backed services on behalf of investors.

As with other investments such as the development of housing and industrial units, care homes can deliver a healthy, medium-term return by meeting a rising but still underserved need. Investment in care homes is also a valuable opportunity to support the health and welfare of our communities.

We acquired the 80-bed purpose-built Chestnut Lodge Care Home on behalf of our investors. Conveniently located near Bradford city centre, Chestnut Lodge provides accommodation and support for people who need residential, nursing or dementia care.

Opportunity for uplift

This acquisition was a perfect fit for our portfolio, providing an opportunity to deploy a value-add strategy. While Chestnut Lodge is a purpose-built facility in an area of high demand, it was in need of significant investment when we bought it. The underinvestment and inefficient management had manifested themselves in poor trading performance.

Through renovation, enhancement of facilities and staff training, we aim to create an attractive, friendly and comfortable home for residents, ensuring that the highest quality of care is provided. This all contributes to establishing and cementing the reputation of Chestnut Lodge as a preferred destination, which in turn maximises occupancy and optimises returns for our investors.

The journey so far

Pausing to focus on COVID-19 protection

Having refurbished the first of the home’s four wings immediately following acquisition, the intention was to refurbish each wing in turn to establish the home as a new, higher specification offering as quickly as possible. Just as we were moving on to the second wing, we were faced by the COVID-19 emergency and these plans had to be adjusted. We suspended the refurbishment work to focus on protecting residents and staff. Limiting the risk to residents and staff and navigating an extremely challenging trading environment were our primary focus throughout 2020 and 2021.

Raising the bar

In 2022, we were able to resume the project, working wing by wing to transform the care home. The exceptional new facilities include ensuite level access showers and toilet facilities in every room, along with upgraded disability access and beautifully redecorated communal areas.

Working with our new management partner, Harbour Healthcare, we have also made significant investments in recruitment and training. Harbour is a highly respected, family-owned care home operator. The company’s commitment to providing excellent standards of care and ensuring that residents’ days are filled with love, compassion and fun aligns perfectly with our values.

Harbour is a well-established UK-wide operator with an excellent track record, which means that Chestnut Lodge also benefits from economies of scale within its operations, which keeps costs contained without compromising quality.

While Harbour oversees the day-to-day operations of Chestnut Lodge, we closely monitor care and performance through regular meetings and frequent home visits, along with consistent dialogue in between.

Outlook for 2024 and beyond

Having weathered COVID disruption, we have been able to transform the physical asset and bring in an operating partner capable of ensuring the quality of care aligns with the quality of the new property. As a value-add strategy, Chestnut Lodge is on a journey, but we have made significant strides and are now well placed to drive performance,

A care home we can be proud of

David Stein, Investment Manager at Stellar Asset Management, oversees strategy, operations and performance at Chestnut Lodge and has helped to plan and direct the refurbishment. Commenting on the benefits for residents and investors, he said: “Chestnut Lodge has been transformed, with new facilities, a new operating team and renewed ability to deliver the highest possible standards of care. This is a spacious, comfortable and well-equipped care home, where every resident is treated as an individual. This makes both living and working here an enjoyable and fulfilling experience. We are excited to continue on this positive trajectory and to generate favourable outcomes for all stakeholders, including residents, staff at the home and our investors.”