Paragon Development Finance has completed a £13.3m development finance facility for North Bay Group to support the construction of a new purpose-built care home in Chester.
The funding includes an initial advance against the land and will support the full development and fit-out of the scheme on Boundary Lane.
Once complete, the project will provide a 75-bed care home offering residential and nursing care. Each bedroom will include a private wet room, while the development is targeting an EPC A rating.
Construction began during the first quarter of 2026 and is expected to complete in late 2027.
Development finance supports care sector growth
The Chester scheme is being delivered in an area with growing demand for care provision. Cheshire West and Chester has a population of more than 370,000, with more than a fifth of residents aged 65 and above. That proportion is expected to increase over the next decade, supporting demand for additional care home capacity.
The transaction marks Paragon's first completed deal with North Bay Group. A further scheme has already received approval, while three additional opportunities are progressing through the pipeline.
“Delivering modern, fit-for-purpose care homes is critical to meeting growing demand in areas with an ageing population," said Adrian Reeves, senior relationship director at Paragon Development Finance. "Chester and the wider Cheshire region demonstrate clear long-term demand fundamentals, supported by population growth and a rising proportion of older residents.
“North Bay combines development expertise with an established operating platform, which is a strong foundation for schemes of this scale. We are pleased to support this first transaction, with more in the pipeline, and look forward to building on this relationship.”
North Bay Group, which was established in 2007, develops and operates care homes across the UK. The business currently operates 48 facilities with more than 2,500 beds and has built its portfolio through a combination of development activity and long-term asset management.
“This development represents another significant milestone for North Bay Group as we continue to expand our portfolio of high-quality care homes across the North of England," said Richard Hoggart, chief executive officer at North Bay Group. "Chester is a location with strong demographic demand and an increasing need for modern, purpose-built care environments.
“With our fully integrated model of developer and operator, we ensure we are developing highly sustainable care homes with renewable energy and Solar PV, achieving a high-grade EPC A. This scheme is a strong example of our long-term commitment to delivering facilities in communities where demand for quality care continues to grow.
“We are delighted to be working with Paragon Development Finance on this project. Their understanding of both the development and operational aspects of the care sector has helped create a funding solution that supports our ambitious growth plans, and we look forward to building on this relationship as we bring forward further schemes in the future.”
The completed care home will be operated by Highgate Care, which said the scheme forms part of its continued expansion into areas where demand for care services is increasing.
“The Chester development represents an exciting next chapter in Highgate Care’s continued growth and our commitment to expanding into areas where demand for high-quality residential, nursing and dementia care is increasing," said Joanne Fogg, managing director at Highgate Care.
“As we grow, our focus remains on delivering exceptional care environments that place residents, families and communities at the heart of everything we do. Our ethos that ‘Kindness Is Key’ underpins every aspect of our homes, from the quality of care we provide to the welcoming and supportive environments we create.
“We are looking forward to bringing that approach to Chester and providing a care home that will support local families for many years to come, while helping to address the increasing need for high-quality care provision across the region.”
The latest transaction strengthens Paragon's presence in the healthcare sector and represents the first in what both firms expect to be a broader pipeline of development finance opportunities.
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