An upsurge in planning applications for nursing homes was seen during the last few weeks of 2009 as developers sought to enhance the value of their development sites and also meet the deadline for one of the few remaining property development tax incentives.
A survey by Construction Information Services (CIS) Ireland shows that 177 planning applications were lodged for new nursing homes in Ireland in 2009, of which about 41 were in Northern Ireland and 136 in the Republic. The overall figures reflect an increase of 16 on the 2008 figures. As many as 90 were granted full planning permission in 2009 and the vast majority of these were in the Republic.
A further 26 applications for extensions/alterations to nursing homes were lodged in 2009 and 29 were granted, including some of the 2008 applications.
In Fingal County Council area, as many as five new applications were lodged in the last week of December 2009 for new nursing homes, two in Naul, and one each in Sutton, Castleknock and Swords.
Among those to apply for nursing homes in Cork, Galway, Wexford, Clare, Mayo and Kilkenny was the state-owned forestry company Coillte. It has an extensive land bank around the country. In last year's Finance Bill Minister Brian Lenihan set a deadline of December 31, 2009 for planning applications for new nursing homes in order to qualify for capital allowances.
Furthermore only expenditure that is incurred before the end of June 2011 will qualify for allowances.
This will encourage construction starts this year once planning permissions come through.
Pat Nolan, a respected advisor on nursing home developments, says most applicants will aim to secure a letting or sale agreement to an established nursing home operator in order to persuade a bank to fund the project.
"There is good demand from established operators who are seeking to expand their operations," he says. "Most operators wish to lease rather than purchase, thereby maximising their available equity.
"Developers might hope to secure between €5,500 and €9,500 per bed per annum depending on location, the quality of the fit-out and size of home," he adds.
While operators had been struggling to maintain occupancy rates, Health Minister Mary Harney brought some clarity to the market by introducing the Government's Fair Deal for elderly people.
New nursing homes are also expected to benefit from The Health Information Quality Authority (HIQA) inspections.
These could result in the closure of some nursing homes which are not meeting standards and those whose operators are close to retirement.