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MHA and Mencap rescue 25 ex-Southern Cross care homes

Finance | Tania Mason | 5 Oct 2011

Housing and social care charity MHA has taken over the leases for 18 former Southern Cross care homes, while Mencap has taken over seven.

MHA has acquired 14 of its 18 new leases from Prestbury Investment Holdings, the property management company owned by Nick Leslau, who also owns Thorpe Park, Alton Towers, Madame Tussauds and St Katharine Docks.  Mencap’s new homes make up the balance of Prestbury’s 21-strong nursing home portfolio.

Previously, all 21 homes were owned by Prestbury and operated by Southern Cross on a 30-year lease from May 2005.

According to Prestbury’s 2010 accounts, the rental income from the care home portfolio was £7.5m and the company expected this to increase by 2.5 per cent annually.

Southern Cross is now being wound up after flirting with administration earlier this year.  Falling occupancy rates left it unable to meet rising rental bills and since then its 751 care homes have been farmed out to other private and voluntary-sector operators.

New operators have reportedly been secured for around 90 per cent of the homes.

MHA, also known as Methodist Homes, is one of the largest charitable care home providers in the UK and has been delivering services in the sector for nearly 70 years. The addition of the 18 new homes will add 1,500 more employees to its existing 7,000 staff

MHA chief executive Roger Davies said the charity had carefully considered how many additional homes it could support while not compromising on service quality.  He added that while it is subject to the pressures of the care environment, particularly fewer local authority referrals and fees that are mostly frozen, “MHA experiences good occupancy levels due to its quality of care and is confident in extending this to new services”.

With the addition of the 18 Southern Cross homes MHA will be providing residential, nursing and specialist dementia care to almost 5,000 older people in care homes along with the 10,000 beneficiaries who it supports to live independently.

It said it did not have to raise any finance to take over the homes.

The seven homes that are being transferred to Mencap are in East Anglia and the East Midlands. Around 470 Southern Cross staff and 200 people who use the services will transfer to Mencap.

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