Consorto asked Ola Owolabi, Account Manager with prominent UK care home company RB Care Homes, why investors should target the sector and to run through the benefits of the RB Care Homes investment on Consorto.

Invest in the UK care home sector on Consorto
Invest in the UK care home sector on Consorto

Q. How is the UK care home sector performing?  

A: The UK care home sector is performing consistently, as expected. We are happy with our homes performance and are seeing improvements in our operations and occupancy levels, which are never below an average 85% across the board. RB Care Homes expects the sector to strengthen further over the coming months into 2020 as the need for beds is still rising and smaller operators struggle. We are looking forward to more opportunities for additional growth and expansion in 2020. In addition, the UK has the most sophisticated housing market in the world and property continues to lead the way in global property growth balanced by stability and long-term capital growth.

Q. Is Brexit having any effect? 

A: We do not see Brexit as a huge issue. Workers can still gain employment and ultimately, we will receive more as a country from not supporting Europe. Less money going out means more money staying in Britain for things like education, healthcare and police. The UK was never spending euros so from a monetary perspective the GBP (Great British Pound) has always maintained its power base from the commonwealth, which boasts some of the most powerful economies worldwide, including India, New Zealand, Canada, Nigeria and Ghana. These countries represent the top three spots on their continents and the UK continues to be one of their top trading partners, which mitigates any slump in trade with European countries in the future.

Why invest in the UK care home sector?

Q. Why should CRE investors consider the investment?

A: It’s a safe stable investment – asset-backed investing in homes that have been running since the 1980s, in some cases. All homes are the industry are regulated and our fees are mostly paid by local funding through pensions. All this adds up to be a safe, sound and sustainable investment, which is unparalleled in markets where investors want stability, security and success without the hassle of managing their investment. Thus, this is without question one of the strongest positions to be in presently when considering success and security balanced with lower risk appetites.

Fee income breakdown

Here is an average rough fee income breakdown.

  • Income on each room varies between £650 and £850 per week.
  • Investor returns are up to 10% per annum.
  • If we use a lower-end income of £650 and a higher-end return of 10% in this example.
  • A £75,000 room costs us £144 per week to pay the investor.
  • Deducting £144 from the £650 income per week still leaves us with over £500 to service that one room for the week.
  • If you total up £144 per week to the end of the month, it’s £600 give or take. So, at the end of each month, to pay an investor his 10% return doesn’t even cost us a full week’s fee income to that one room and the other three weeks of that month’s income goes back into the business.
  • Tally that up for a year and 12 weeks income pays the investor their 10% and the other 40 weeks goes back into the business.

Q. How much is the ageing population affecting demand? 

A: The ageing population is hugely affecting demand, especially baby boomers born after World War II. There will be and always has been a need for care and we are happy to help and fill that void.

What makes RB Care Homes different?

Q. Tell us about RB Care Homes – Where are your homes? What services do you provide? How many employees do you have? What is your ethos? How many people do you care for? What makes it different?

A: We have 17 homes in total, based all over England and Wales. We provide nursing services and specialize in dementia and Alzheimer’s and are a part of dementia friends and Alzheimer’s society. RB Care Homes has over 1,000 employees across all our homes and we care for well over 500 residents.  We like to think we are different as we add a personal touch and come from healthcare and finance backgrounds. We realize that a small change in home KPIs (Key Performance Indicators) can make a huge impact on the running of the business from a financial perspective and not have any impact if not only improve the care given to our residents.

Highlights of the Consorto investment listing

Q. What are the highlights of your investment on Consorto and what are the main benefits for investors?

1. Completed and operational Care Homes, so no development risk
2. Immediate income
3. Asset-backed
4. Stress-free
5. No Stamp duty 
6. No running costs
7. No liability for renovation, refurbishments or damage to property

Other benefits include: 

  • Buy directly from the owner
  • Returns paid quarterly
  • All the RB Care Homes are open and operational
  • No maintenance fees and ground rent fees
  • Non-correlated to investment markets
  • No off-plan developer risk
  • No agency commission fees or tenants to deal with
  • Specialist Care rooms; dementia, mental health, 1-2-1 care
  • Hands-off investment and fully managed UK care home
  • Experienced specialist management team protecting your investment

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