AXA investment arm buys 10 Irish care homes for unnamed client

AXA Investment Managers' (AXA IM) real estate arm has acquired a portfolio of 10 purpose-built care homes on behalf of an unnamed client, marking the French asset manager's entry into this sector in the Republic.

The portfolio, consisting of 600 beds and 52 additional living units across buildings that were all built since 2002, will be operated by Mowlam Healthcare under 25-year leases.

Mowlam is the largest player in the industry in Ireland. Financial details were not disclosed.

It is understood that Mowlam owned five of the homes, while the others were individually owned and run by the company. They are based in Dublin, Limerick, Galway, Sligo, Waterford, Wexford and Kilkenny.

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“The Irish care home market is characterised by high occupancy rates and favourable demand/supply dynamics, fuelled by a lack of development activity during and immediately following the global financial crisis, as well as ongoing high barriers to entry,” AXA IM said.

This portfolio acquisition allows us to enter what is a fast-growing and demographically supported sector

The percentage of the Irish population over 64 years of age is forecast to grow from 13.4 per cent in 2016 to 18.4 per cent by 2030, according to the EU statistics office, Eurostat, which will increase the demand for care home beds.

AXA IM noted that the Irish market was “highly fragmented”, with three-quarters of care beds made up of individual homes operated by single owners.

"This portfolio acquisition allows us to enter what is a fast-growing and demographically supported sector," Andrew Ovey, head of healthcare at AXA IM, said.

Mr Ovey said that working with Mowlam, which is in charge of 1,500 beds across 27 facilities, should “ensure that we are well positioned to benefit from further opportunities which may arise in what is a hugely fragmented and undersupplied market”.

As a result of the deal, Mowlam, in business in Ireland for almost two decades, will become a pure nursing home operating company, with all of its buildings under third-party ownership. The company said it employs 1,600 staff.

Mowlam’s chairman Pat Shanahan said that the deal would also “enable us to advance our plans to bring that gold standard care service to more parts of the country as we look to operate more homes”.