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Niche investment turning property into cash flow

The UK care home market is undoubtedly a niche one but it still throws up plenty of opportunities for those investors looking for sustainable levels of income – and it is so much more than a play on property.

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Portfolio manager John Godden describes the Montreux Care Home Fund as ‘applied property’ or ‘property plus’ and not simply a proposition basing its returns on the appreciation of property prices on the whims of market valuations.

“We are using [property] to provide a service and that service provides a fairly predictable stream of cash flow and that is really where the value is coming from,” he explains.

All of the care home funds 162 properties in the UK but does not own the properties for the sake of owning bricks and mortar. There is also a rent element but it is this cash flow that provides a solid yield supplemented, he says, by the dominant feature which is the provision of care.

And growth is out there too – looking ahead, the fragmented UK market means Godden sees the opportunities to buy homes at very good prices continue to appear without needing to look overseas for expansion.

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