Paragon Development Finance is supporting the acquisition and development of a new 71-bed care home in Birmingham, expected to reach a mature trading value of over £25 million once complete.
The funding has been provided to MACC Care Properties to acquire a brownfield site on Shaftmoor Lane in Hall Green, Birmingham, where the operator will develop a 44,132 sq ft purpose-built care home. Once finished, the scheme will become MACC Care's 21st care home.
Steve Mountain, senior relationship director, led the deal on behalf of Paragon, with support from senior portfolio manager Darren Ellis and portfolio manager Olly Das.
The transaction reflects Paragon Development Finance's ongoing focus on diversification, as the specialist lender broadens its offering beyond residential development to respond to shifting demand and changing demographics.
Alongside residential housing, the division has increasingly turned its attention to sectors such as build-to-rent, later living, purpose-built student accommodation and, most recently, care homes.
Demand for care home provision is expected to keep rising as the UK's population ages. The ONS projects that the number of people aged 65 and over will increase significantly over the coming decades, with the population aged 85 and above growing at the fastest rate. Independent research suggests close to half a million people currently live in care homes across the UK, with further capacity needed as longevity increases and care needs become more complex.
"We are delighted to have worked with Paragon Development Finance on their latest transaction in the care home sector," said Dr Naz Nathani, chief executive of MACC Care Group.
"This latest scheme reflects our strong track record of consistent delivery across both development and operations, and our focus on scaling a clinically led, innovative care platform, creating high-quality, luxury care environments.
"We valued the collaborative approach taken by Steve and the wider team in structuring a bespoke, sector-aligned funding solution that recognised the specific requirements of specialist care assets. As we continue to expand our platform, we look forward to building on this relationship and undertaking further transactions with Paragon to support our ongoing growth."
Mountain said the deal had taken time to put together but reflected the strength of both the scheme and the wider sector.
"This was a client-led opportunity that required careful structuring over an extended period, but by working collaboratively with the borrower, we were able to deliver a facility that reflects both the strength of the scheme and the long-term fundamentals of the care home sector.
"Diversification is a key focus for Paragon as we respond to sectors that are increasingly critical to the UK's long-term housing and care needs. We continue to support sectors that are critical to meeting the UK's evolving housing and care needs."
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