Welltower, the U.S. healthcare real estate giant, has completed what is thought to be the world's largest care home transaction, buying the real estate portfolio of Barchester in a deal valued at £5.2 billion.
Knight Frank is the sole adviser on the transaction, worth US$6.88 billion. Irish horse-racing billionaires JP McManus, Dermot Desmond and John Magnier are to receive most of the proceeds as the largest shareholders in Barchester, the United Kingdom's largest care home operator, with over 14,440 beds and more than 240 care homes.
The transaction means Toledo, Ohio-based group Welltower is now, by some distance, the largest owner of senior housing in the United Kingdom with a £10 billion portfolio that also includes as the Avery, Signature, Sunrise and Care United Kingdom businesses.
The group had tried to buy the business after a sales process started in 2018 but in 2020 Desmond, McManus and Magnier reversed plans for the sale after the pandemic highlighted the need for private care homes.
Welltower confirmed the transaction in an earnings call, in which it said it had completed acquisitions and sales totalling $23 billion in the seniors rental housing space.
Welltower said the activity was driven by $14 billion of acquisitions, primarily comprising high-quality seniors housing in the United States and United Kingdom.
It says the acquisitions will be fully funded through proceeds from $9 billion of asset sales and loan repayments, as well as cash on hand. It expects the acquisitions to be accretive to its normalised funds from operations per share in 2026.
Major portfolio
The largest acquisition was the real estate portfolio of Barchester-operated properties, where Welltower formed an exclusive long-term partnership with operator Barchester. The management team remains in place.
The portfolio comprises 111 communities managed by Barchester via a RIDEA contract, 152 triple-net leased communities and 21 ongoing developments, which will also be managed in a RIDEA structure. A RIDEA structure allows a real estate investment trust to participate directly in the operating income of healthcare facilities, instead of receiving a fixed rental payment.
Blended portfolio occupancy is in the high 70%s.
Pete Calveley, Barchester's chief executive, said in a statement released with the earnings: "Through our strategic partnership with Welltower and their significant and ongoing investment into their operating platform, we expect to continue to meaningfully enhance the lives of thousands of older adults by delivering not only exceptional care but also fostering environments rich in social and cognitive engagement."
Welltower has separately bought 100% of the HC One-operated United Kingdom care homes portfolio for £1.2 billion. Welltower funded a portion of the purchase price through the repayment of a £660 million loan it originated at the height of what it called "the COVID-19 pandemic and Brexit uncertainties" saying it significantly increased the investment's duration through ownership of the underlying communities.
The substantial United Kingdom investments were aided by working closely with the government's Office for Investment, Welltower said.
Lord Stockwood, United Kingdom Minister for Investment, said: "This significant investment into the care sector, will create new capacity, and new jobs, the vast majority of which will be outside of London. High quality care for our aging population is one of the most important challenges the government faces. I'm glad to see a long-term and highly respected investor like Welltower continuing to bring their expertise, commitment and technology" to the United Kingdom.
US East Coast properties
Additionally, Welltower said it is under contract or has closed an additional $4 billion of seniors housing acquisitions spanning nearly 40 transactions across over 150 communities and over 12,000 units. It said: "This encompasses trophy senior housing communities along the East Coast, including those within Boston and Westchester County, NY. These acquisitions complete the company's New England portfolio repositioning that started with the pre-COVID disposition of $1.75 billion of seniors housing communities."
"Today's announcements mark a watershed moment in Welltower's history as we continue to evolve: intensifying the company's focus on seniors housing and accelerating the operational and technological modernisation of the business through the Welltower Business System," said Shankh Mitra, Welltower's chief executive.
Julian Evans, Partner and Global Head of Healthcare at Knight Frank, said: “We are proud to have advised on such a landmark deal for the UK and the global care home sector. The UK is a key destination for international capital and the care home and senior living market offers attractive returns, underpinned by demographics and existing undersupply. It is vital the UK continues to attract investors and operators like Welltower to build scale and increase supply.”
This week Knight Frank reported that the United Kingdom healthcare market is on track to complete £12 billion of property transactions in 2025. That figure would represent a record for annual investment into the sector, and is more than treble the long-term yearly average, Knight Frank said. It has been driven by a significant increase in appetite for exposure from cross-border family offices, insurance firms and REIT investors attracted by the sector’s countercyclical characteristics amid an increasingly uncertain market environment.
Knight Frank said United States capital has accounted for a high proportion of United Kingdom transaction volumes in recent years, and in 2025 several have taken opportunities to consolidate and scale newly acquired operating platforms. It described Foundation Partners’ £100 million deal for Hartford Care as indicative, following Welltower’s own acquisition of Care UK in 2024.