How Refurbishments Increases Sale and Investment Value in Care Homes

The UK care-home market has entered a phase of renewed investor confidence. Christie & Co’s Care Market Review 2025 notes that deal activity has returned to pre-pandemic levels, fuelled by rising occupancy, reduced agency costs, and sustained buyer interest from both domestic and overseas capital. Knight Frank reports average occupancy for elderly care homes at around 86%, with weekly fee rates up nearly 10% year-on-year (April 2025).

Against this backdrop, refurbishment has become a decisive factor in how both sellers and investors create and protect value. Whether preparing a home for sale or seeking to increase returns after acquisition, the evidence now shows that condition, compliance, and energy performance are as influential as location or brand reputation.

For owners planning to sell

Buyers are pricing in future capital expenditure more heavily than ever. Poor EPC ratings, dated interiors, or inefficient systems translate directly into downward valuation adjustments. In contrast, targeted refurbishment in key operational zones — bedrooms, bathrooms, and communal areas — can increase achievable sale value and shorten deal timelines.

According to Christie & Co’s sentiment survey (2025), institutional buyers now favour assets with “strong ESG credentials and low deferred maintenance risk.” Those qualities allow them to secure financing on better terms and avoid post-acquisition downtime. For owners, that shift in buyer preference presents an opportunity: pre-sale refurbishment can yield a multiple uplift far exceeding the initial spend.

Typical examples include:

• Replacing lighting and glazing to improve energy efficiency and resident comfort.

• Refitting bathrooms and corridors to modern accessibility standards.

• Upgrading mechanical and electrical systems to reduce future compliance exposure.

Grant Thornton’s Care Homes for the Elderly (2025) highlights that energy and property costs now account for nearly 20% of operator expenditure. Sellers who can demonstrate lower operating costs per bed create a stronger investment case, and buyers are willing to pay for it.

For investors acquiring or holding care homes

For investors, refurbishment is no longer optional post-acquisition. It is a performance strategy. Well-planned upgrades protect yield by reducing maintenance overheads and supporting premium occupancy levels.

Cushman & Wakefield’s UK Healthcare Investment Outlook 2024/25 observed that investors prioritising early-stage capital works achieved 10–15% higher net operating income within 18 months compared with those that deferred works. Modernised assets also perform better in ESG scoring and valuation multiples, both critical to fund-level reporting.

In practical terms, the highest-return interventions tend to include:

• Heating and hot water system replacements improving energy efficiency by 15–25%.

• Surface and furniture refreshes improving family perception and tour conversion.

• Phased refurbishment plans that minimise operational disruption while demonstrating asset stewardship to lenders.

By approaching refurbishment as part of a planned capital cycle, investors also strengthen exit flexibility — able to sell or refinance at improved valuations.

Shared logic: refurbishment as capital strategy

The alignment between seller and investor priorities is clear. Both are motivated by the same fundamentals — stable occupancy, predictable costs, and resilient reputation. The market is rewarding operators and owners who invest ahead of demand rather than react to deterioration.

Refurbishment transforms a cost centre into a capital lever. For sellers, it drives stronger offers and smoother transactions. For investors, it protects yield and long-term value. As ESG scrutiny and energy standards tighten, refurbishment is fast becoming a baseline expectation in every due-diligence checklist.

With more institutional capital entering the sector and portfolio transactions increasing, the quality divide between refurbished and outdated stock will widen. Homes upgraded for compliance, comfort, and sustainability will continue to outperform in valuation and liquidity.

For both groups, the message is the same: refurbishment is not just about appearance. It is the mechanism that underpins performance, risk control, and investor confidence.

For owners planning a sale or investors seeking to optimise a new acquisition, DJT’s refurbishment planning consultations help define the right scope, sequencing, and cost-return profile.

If you’d like to learn more about refurbishment options for your care facilities, get in touch using the form below.

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