Paragon Development Finance has provided £13.3 million in development finance to North Bay Group for the construction of a 75-bed care home in Chester. The facility on Boundary Lane is scheduled for completion in late 2027, with construction having commenced in the first quarter of 2026.
The funding package includes an initial land advance and will cover the full development and fit-out of the scheme. The development is designed to achieve an EPC A rating, with each bedroom featuring a private wet room.
Demographic drivers
The project is located in Cheshire West and Chester, where more than 20% of the 370,000 population is aged 65 or above. This proportion is projected to increase over the next decade, supporting demand for additional care home capacity in the region.
The transaction represents Paragon’s first completed deal with North Bay Group, though a second scheme has received approval and three additional opportunities are in the pipeline. Adrian Reeves, senior relationship director at Paragon Development Finance, said: “Delivering modern, fit-for-purpose care homes is critical to meeting growing demand in areas with an ageing population.”
North Bay Group, established in 2007, currently operates 48 facilities with more than 2,500 beds across the UK. The company develops and operates care homes through a fully integrated model. Richard Hoggart, chief executive officer at North Bay Group, said the development incorporates renewable energy and solar PV as part of its sustainability strategy.
Operational arrangements
The completed facility will be operated by Highgate Care, which is expanding into areas with increasing demand for care services. Joanne Fogg, managing director at Highgate Care, said the Chester development forms part of the company’s growth strategy in residential, nursing and dementia care provision.
The care sector continues to attract development finance as operators respond to demographic pressures, though the broader property market faces pricing pressures in other segments. While residential landlords consider portfolio reductions, purpose-built care facilities are positioned to meet specific demographic needs in regions with ageing populations.
The transaction strengthens Paragon’s position in the healthcare sector, with both parties indicating expectations for further development finance opportunities in the pipeline.
