Reply To: High Base Rent for Supported Scheme

Andy Thurman

There is a lot to unpick from this…
Firstly, is £725k a reasonable valuation? What ‘refurb’ is there? Setting up a sensory room is clearly important but how much does that actually cost? If not, why are the pension fund prepared to pay so much for it (and who is making the excessive profit for a resale after minimal work?
Is a 7% yield reasonable – it is higher than current averages and does not (I’m assuming) need to cover many of the usual expenses as these will be borne by the HA and added on as service charges.
What other options have the CIC considered? How/why are they entering into this arrangement?

Comparison to a care home is not directly relevant. What is relevant is that the base rent is far higher (approx 50%) than the most expensive 3-bed rent for the area.