Care property · For developers and investors
What a funder asks that a residential lender never did
Care assets are valued on the income the operator can sustain, not on comparable square footage. That single difference is behind most of the surprises developers meet on their first scheme.
Rent cover is the number
A lender or investor wants to know how much headroom there is between what the service earns and what it owes you. Below about 1.5 times, the lease is fragile whatever the covenant looks like on paper. Around 1.8 and above, it holds through a bad year.
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What rent will this scheme actually cover?
Beds, weekly fee, occupancy and operating costs in. Earnings before rent, the rent cover ratio and an indicative sustainable rent out. This is the arithmetic your funder will do, so it is worth doing first.
How you hold it
The structure decides your risk, your yield and who you can sell to. Most developers arrive assuming one of these and leave having chosen a different one.
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Which tenure structure fits — and what does it cost you?
Four questions on your appetite, hold period and exit. It sets out which of the three common structures fits, and what each one costs you in return or in control.
The exit
A let, trading, well-rated care asset on a long index-linked lease is bought by specialist healthcare investors and REITs, and it is bought on yield. An unlet building is bought by a developer at a discount, and an unregistered one may not be bought at all in its current form.
Everything on this page is upstream of that. The exit price is set by decisions taken at feasibility, and mostly by the operator you put in.
We are not authorised to give investment advice and we do not arrange finance. We provide the care sector evidence a funder needs and we will introduce you to lenders and investors who are active in the sector. Anything that constitutes a regulated activity goes to someone authorised to do it.
Tell us about the site
Thirty minutes, no charge, and nothing to buy at the end of it. If the scheme will not let, we would rather tell you now than take a fee to find out slowly.