CARE HOME RENT COLLECTION REMAINS ROBUST DESPITE COVID CHALLENGES
Latest figures from real estate advisor, CBRE, show that UK care home rent collection was 96.8% in June 2020, despite the sector being on the frontline of the Coronavirus pandemic. Across all real estate sectors in the UK, the collection rate in June 2020 was 80.6%.
Sam Wright, Senior Director, CBRE OPRE, commented:
“With difficulties in sourcing PPE, increased operating costs, staff absences, a drop in new referral rates and the impact of the virus itself; Q2 2020 was a difficult time for care operators. Despite this, they kept their care homes open and continued to focus on delivering care to those who need it.
“To support this, we have seen the care home specialist landlords working closely with their tenants to foster collaborative working, share best practice, and develop real estate led solutions.
“These real estate led solutions have ranged from the creation of new externally accessed visitor’s rooms with internal screens, to the purchase and installation of thermal imaging cameras. The purpose of these solutions has not been just to reduce the risk of COVID transmission into and within the homes. They have also been designed to help their tenants reassure staff, residents, prospective residents and their families, that the home is taking every measure it can to try and keep them safe. While the landlords have done this because it is ‘the right thing to do’, the added reassurance for new referrals will also support their tenants to re-build their occupancy levels. This in turn will support the business and help the tenants to pay their rent.
“While this engaged and proactive approach will have contributed to the 96.8% rent collection level achieved by the care home specialist landlords across 23,577 beds in June 2020; it is undoubtedly the dedication of the care staff at each of the homes, and the largely needs driven nature of the service they provide that has been the key driving force behind this. Furthermore, excluding care homes where rent was not collected because of either pre-COVID problems or pre-COVID asset management agreements, the rent collection level increases to 98.6%, thereby further underpinning the defensiveness of the sector. This shows that even in a black swan event where the industry is on the front line and care operators face an array of financial and operational challenges, rent collection levels have remained robust.
“It is still too early to predict what the next 12 months hold for the care sector and if/when there will be a second or third wave. Nevertheless, most operators are now well prepared for the second wave and, while occupancy levels fell c 8%-10% overall, they did not reach the apocalyptic levels that some were predicting and are now beginning to rise. So, while challenges remain, the general outlook for the sector is positive.”
 Data sourced from Elevation Advisors, Impact Health Partners, Kames Capital, Layland Walker, Octopus Real Estate and Target Fund Managers who collectively cover 23,577 beds across the UK
 Data sourced by CBRE’s Property Management Accounting Team