UME have been an essential part of the planning and design team that have translated our vision for primary care
and community services into Health and Well-Being Centres that will be fit for purpose for the future.
Andrew Ridley
Director of Primary Care
Tower Hamlets PCT
Director of Primary Care
Tower Hamlets PCT
New 4 OldCare centres for older people, Croydon
Challenges
Funding the project in a way that allowed all parties to realise their individual investment criteria, whilst still being tax efficient. The key elements are:- The care homes are costed and funded on a traditional basis with senior debt funding and 92:8 gearing.
- The residential livingunit is run by an RSL under Housing Association rules and therefore cannot be funded under ProjectCo’s funding arrangements.
- The land is leased to the RSL for 125 years, considerably longer than the 30 year concession and the Authority have requested a residual value bullet payment arrangement.
- The RSL is therefore borrowing the capital funds from the bank to build the unit and will receive rents direct from the tenants to fund the loan repayment, plus the lifecycle replacement.
- The RSL will also receive a portion of the unitary tariff to cover the hard FM maintenance elements of the building.
- The equity is split three ways between UMEI, Osborne Construction and the RSL. Whilst the RSL is not directly investing, it has some monetary input through the grants available for the residential living building.
- There are different levels of return required by private companies and registered charities.
