Nursing homes and hospices construction projects are experiencing a notable surge, reflecting increased investment across the healthcare facilities sector.
The October edition of the Glenigan Construction Review shows that projects starting on site in the three months to September were significantly higher than the same period last year, underlining strong demand and activity in this vital area of development.
Indeed, nursing homes & hospices accounted for the largest share (31%) of all health sector starts in the three months to September. Project starts in the specialist field were worth £318 million in the period, almost double the level of a year earlier.
A growing elderly population and other market forces are driving growth in activity in the sector. A recent healthcare survey from agents CBRE noted that continued government investment in specialist care services and increasing demand from an aging population mean elderly care homes are continuing to attract investment.
In contrast to traditional sheltered housing schemes, developers of care homes rely less on their elderly customers selling their existing homes, which can be difficult today, before agreeing to take up occupancy.
Recovery in activity
In recent years, developers of nursing homes have faced challenges with rising land prices, high interest rates, and construction costs, as well as slow planning approvals. Yet the CBRE survey showed that 46 per cent of developers are planning to take on more care home projects during 2025. Three-quarters expect development activity to recover by the end of 2026.
The North West has some of the strongest development prospects in the sector, driven by the region’s high care home occupancy rates and long NHS waiting lists.
One project in the North West where detailed plans have been submitted is a £10.5 million care home at Frodsham in Cheshire (pictured). The scheme, which is at the pre-tender stage, involves a 75-bed care home for client Octopus Real Estate with work pencilled in to start next spring (Project ID: 23012700).
The CBRE survey also highlights the emergence of a luxury market for care homes, notably in Scotland and Northern Ireland. One example in Broughty Ferry, Dundee, reflected in Glenigan data shows work started last month on a £14 million scheme involving a 54-bedroom care home along with open spaces and infrastructure. (Project ID: 20068699).
Projects getting underway
Glenigan data provides numerous other examples of nursing home and hospice projects of varying sizes that are getting underway across the country.
At Great Yarmouth on the Norfolk coast, detailed plans have recently been approved for the £15 million Gorleston community hospice development for client St Elizabeth Hospice. Barnes Construction has been appointed on the scheme, where work starts next summer and will run for up to two years (Project ID: 12087317).
Elsewhere, in Horsham in Surrey, tenders are being invited for a £12 million project at Kingsmead Nursing Home, where detailed plans have been granted for an 80-bed specialist dementia care home. Work on the scheme, involving almost 5,000 sq m of space, is set to start early in the new year and run for 17 months (Project ID: 24205325).
Moving north to Newark in Nottinghamshire, tenders have been returned, and work is set to start later this year on a £6.7 million new care home at The Oaks Residential Care Home in a project set to run over 13 months (Project ID: 24326308).
Meanwhile, there are some sizeable care home construction schemes in the pipeline in London. An application has been submitted for a redevelopment scheme at Meadbank Nursing Home in Wandsworth involving a £34.2 million project and almost 14,000 sq m of space. Work on the project for Richmond Villages, which is part of Bupa, is due to start next summer (Project ID: 25501034).
Elsewhere in the capital, tenders have recently been returned, and planning conditions are being resolved on a £26 million care home at Hurlingham Road in Fulham, with work due to start later this year (Project ID: 17296328).
