Commercial in confidence 5-star luxury care …...Commercial In Confidence 1. Executive Summary 2 2....

November 2016

Investment Overview The Care Home Group Ltd

5-star luxury care accommodation

Commercial in confidence

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Commercial In Confidence

1. Executive Summary 2

2. The company 3

3. Market analysis 5

4. Developments 8

5. Our InvestmentOpportunity 11

6. Completed developments:Latimer Lodge, Yeovil 15

7. Current developments:Tyndale House, Yeovil 17

8. Current developments:Hurst Manor, Martock 19

9. Investor FAQs 21

Table of contents

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Executive summary

Our missionThe Care Home Group acquires, renovates and operates the premier luxury care accommodation (‘Care Communities’) in affluent areas of the south west of England, providing 5-star levels of care and service to residents aged 65+ who self-fund their care.

The market opportunityThe number of people reaching retirement age in the UK is growing - and will continue to do so at a steady rate for the next 20 years. During this period the number of people aged 85+ will grow by 106%. The number of care beds in the UK is currently declining however, as older properties close due to lack of investment. Industry experts warn of an acute shortfall in beds by 2020. New facilities will be required - and will need to cater for a retiring generation that has higher expectations, and the financial resources to fund them, for care in its later years.

Our propositionThe Care Home Group acquires suitable dilapidated properties and renovates them to a luxury standard using its own property development subsidiary. The Group then operates them, using its dedicated care services subsidiary, as 5-star care facilities for self-funding retirees offering premium standards of professional nursing and care together with hotel standards of customer service. Care Communities offer the full spectrum of care for residents, from assisted living apartments to residential, nursing and dementia care in specialist care studios, meaning that residents’ needs can be catered for throughout their later years as their care needs change.

Revenue generationThe Care Home Group generates revenue through the sale or lease of care studios and assisted living apartments within each Care Community to permanent residents, and through the premium fees it charges for their care, services and support in luxurious surroundings. Short-term ‘respite’ stays are also available. The Group expects to generate an EBITDARM of c.30% at each development once they are fully operational.

Development plan 2016-19The Care Home Group plans to acquire, renovate and operate a large portfolio of Care Communities over the next three years, providing around 500 care beds within specialist care studios and larger assisted living apartments. Phase 1 of the Group’s first Care Community - in Yeovil, Somerset - opens in November 2016, with two further developments in the pipeline.

Investment opportunitiesThe Care Home Group offers a range of investment opportunities for persons who qualify as high net worth individuals, sophisticated investors, and self-certified sophisticated investors.

Long-term strategySubject to successful execution of its development plan the Group proposes to become a publicly-quoted company in 2019-20.

Investment Overview | November 2016

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Company details and structureThe Care Home Group Ltd is located at Units 3-4 Bartec 4, Lynx (West) Trading Estate, Yeovil, Somerset BA20 2SU, with company number 09688688.

The freeholds of each purchased and redeveloped property are owned by a separate Special Purpose Vehicle (SPV), which is a wholly-owned subsidiary of the Group. SPVs are already established for the Group’s two current developments at Yeovil and Martock.

A Group structure chart is shown below.

The Developer is Carlauren Developments Ltd located at Units 3-4 Bartec 4, Lynx (West) Trading Estate, Yeovil, Somerset BA20 2SU. A sister company of The Care Home Group with company number 10151580. Carlauren’s development team includes specialist architects, engineers, interior designers and furniture manufacturers with a proven track record in the residential and care sectors, as well as a skilled sub-contractor workforce of construction tradesmen.

Care, management and support services at each property are provided to the SPV by 5-Star Care Home Management Ltd located at Units 3-4 Bartec 4, Lynx (West) Trading Estate, Yeovil, Somerset BA20 2SU. A wholly-owned subsidiary of the Group with company number 10151662.

5-Star Care Home Management will be registered withthe Care Quality Commission (CQC) for the provision ofresidential, nursing and domiciliary care services at allCare Communities.

The management team of 5-Star Care Home Management have gained more than 35 years’ front-line experience in a variety of adult care settings, including specialist mental health and dementia facilities, managing well-performing residential, nursing and domiciliary care teams and running profitable businesses, achieving full compliance with Care Quality Commission (CQC) and Gold Standards Framework reporting and the requirements of the Health & Social Care Act. The business is supported by Affinity Care Management Ltd, a long-established operator and management services provider.

Administration, finance, HR, sales and marketing and other support services are provided to all businesses from staff employed centrally by The Care Home Group Ltd, based at its Yeovil HQ.

Senior staff of The Care Home Group and subsidiaries:

Sean Murray, CEO & FounderSean is a seasoned entrepreneur with a track record in creating and growing successful businesses and investment opportunities in the UK and international real estate, telecoms and IT markets. Following a number

The company

THE CARE HOME GROUP LTD

PROPERTY FREEHOLDER

SPV1Care Home Freehold

1 Ltd (trading as Hurst Manor Care

Community)

SPV2Care Home Freehold

2 Ltd (trading as Yeovil Care Community)

SPV3Care Home Freehold 3 Ltd (trading as TBC)

SPV4Care Home Freehold 4 Ltd (trading as TBC)

etc...

DEVELOPER Carlauren Developments Ltd

OPERATOR 5-Star Care Home Management Ltd

BACK OFFICE, SALES & MARKETING ETC The Care Home Group Ltd


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of successful product and system innovations spanning internet/mobile phone networks, software and property development, Sean founded The Care Home Group in August 2015 to target what he felt was a gap in the current adult care market for a proposition that brought together premium accommodation with 5-star levels of care, services and support.

Steve Twigg, DirectorAn architecture graduate and full member of the Chartered Institutes of Marketing and Public Relations, Steve leads on investor and residential brand, marketing and communications strategies for The Care Home Group and its subsidiaries - as well as playing a creative role on each development project. He has more than 20 years’ experience of design, marketing, sales and business development within the UK real estate market - including 15 years at Capita plc, the FTSE 100 BPO and professional support services company. As marketing director of its property and infrastructure business between 2006-15 he played an integral role in its growth into one of the UK’s largest consultancies with over 4,500 staff and revenues of £330m. Steve is a director of 5-Star Care Home Management Ltd.

Samantha Hansford, Head of Care OperationsSam has many years’ operational experience within the care sector, with a number of registered manager and other senior management roles within residential and specialised care homes in the south west region. Working for both larger national providers and small family-run businesses, her passion for promoting excellence in care led to her becoming Deputy Chair of

the Dorset Care Homes Association. Sam is a director of the Group’s dedicated care services division, 5-Star Care Home Management Ltd and works closely with registered managers at all care communities, as well as being responsible for maintaining compliance with the Care Quality Commission and upholding an excellent service for residents and visitors.

Kelly Mitchell, Registered ManagerKelly has many years’ experience in a variety of Registered Manager, Nominated Individual and other senior adult and elderly care roles in residential, domiciliary and dementia homes across the south west, for large providers such as Park House Care (UK). Kelly also has experience as an NVQ Health & Social Care Assessor/Trainer. Kelly is a director of 5 Star Care Home Management and the Registered Manager of Yeovil Care Community, responsible for the day-to-day delivery of outstanding levels of care, community engagement, recruitment and training.

Geoffrey Salter, AccountantGeoffrey has over 35 years’ general practice and contract accountancy experience gained in the leisure and industrial industries, including many years within construction and FM businesses. Geoffrey is responsible for the day-to-day Group financial transactions, risk and compliance management, as well as undertaking financial due diligence, business planning, and assessing the commercial viability of all potential developments.


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Market analysis

Demographic changeIt is a well-documented fact that Britain’s population is ageing. In 2012 the number of people aged 65 and older surpassed 10 million for the first time; they now outnumber those aged 16 and under.

The 85+ age group is the fastest growing demographic in the UK, as people live longer through improvements in health, diet and preventative care. Over the next 20 years this age group is set to grow to over 2.6 million people, a massive 106% increase.

This trend will be accelerated over the coming decades by the retirement of the so-called ‘Baby Boomer’ generation, born when Britain experienced a markedly higher birth rate between 1946-64. Those born at this time are now beginning to reach retirement age and are set to have a considerable effect on the people, society and economy of the UK over the next 20 years.

With this dramatic population change comes increasing pressure on specialist dementia and nursing care. There are currently over 800,000 people living with dementia - a figure that will rise to 1 million by 2021, and morethan double by 2050.

Critically, the number of people of working age supporting our ageing population (known as the Dependency Ratio) is moving in the opposite direction; declining from 4 people per retiree at present to 2.5 by 2035 and 2 by 2050.

The Care Home Group’s current developments are situated in Somerset, south-west England, with plans to expand its portfolio across neighbouring affluent areas, such as Dorset, in the near future.

Demand for care accommodation in the region is high, as the county has a significantly higher percentage (26%) of people over retirement age than the national average. This demographic has swelled considerably in the past five years, with a 15% increase in the total number of people aged 65+ including a significant 26% growth in those aged 90+. This trend is set to continue, with a projected rise at almost three times the rate of the overall population of the county by 2025.

Declining care home capacityIn the 12 months to September 2015 there was a net loss of 189 care homes in the UK, equating to 2,200 fewer beds. Almost half of these were lost in the

Analysis of market data by industry experts such as Knight Frank and LaingBuisson consistently shows a growing shortage of elderly care accommodation in the UK. This is down to an increase in demand through dramatic population shift and a decline in the number of existing beds as dilapidated properties close.


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south west of England, where The Care Home Group is focussing its business.

According to Knight Frank’s ‘UK Healthcare Development Opportunities’ (2015), if current trends continue the existing UK bed supply of 456,400 is forecast to fall to 444,700, while the population of over 65s will rise from 11.4 million to 12.4 million, resulting in an acute shortage of care beds by 2020 (Figures 1&2).

There is therefore a need for new, future-proof facilities – but the inflationary cost of new raw materials hasstymied many new build opportunities (Knight Frank‘Specialist Property 2016’). The care sector needs furtherstock but only 6,000 beds are being constructed perannum, less than are being lost through de-registeredhomes. The remodelling, refurbishment and re-useof existing facilities, which can be done quicker andwith less reliance on raw materials than a new builddevelopment, is considered by The Care Home Group tobe a practical solution to this problem.

A key impediment for many care homes in terms of occupancy levels (and therefore profitability) are the estimated 250,000 non en-suite bedrooms currently in the market, which will require c. £15bn to upgrade to modern, wet-room status.

Many of these are in older, traditional homes managed by smaller operators who are finding it increasingly difficult to invest in any comprehensive refurbishment or upgrade works as their rooms become less desirable for residents and occupancy levels fall. Many of these homes are closing, and the large number of obsolete units in the market points to a high availability of stock for refurbishment in the future.

Over 400 care homes are currently advertised for sale on carehome.co.uk, an estimated capacity of 7,000+ beds with c.£14m of stock available in the south west. The Care Home Group has resources internally to research, monitor and assess available stock on an ongoing basis.

A well-performing self-funded market Elderly care in the UK has effectively become a two-tier system in recent years, with a growing gulf between the performance of operators catering for privately funded residents and those reliant on local authority funding.

The sector is frequently under the national media

spotlight – with coverage mainly focused on the struggles of those operators that cater mainly for residents funded by their local authority, where a reduction in real terms in the funding available for their care is making it very hard to run a viable business.

This means that many poor performing/state funded homes are closing down, increasing demand for accommodation, and stock available for refurbishment.

At the same time, homes which concentrate on privately funded residents – mainly in more affluent areas of the UK such as the south-east and south-west of England, where around half of all residents are self-funding – are performing well.

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Figure 1: UK care bed demand and supplyBed supply v Population of over 65s

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Figure 2: Net loss/gain of beds across UK regionsOctober 2014 - September 2015

Sources: Knight Frank, Experian, LaingBuisson (2015). * projected figures.


Research by Knight Frank (2015) identified over a third of care homes assessed generating EBITDARM as a percentage of income in excess of 30%, with 9% generating profit margins of 40% or more (in contrast, poorly performing homes were generating EBITDARM of less than 10%).

A number of providers already operate successfully in this sector of the market both regionally and nationally, with high occupancy and profit levels, offering care suite accommodation for sale/lease to residents

Spending power of today’s retireesMore than a third of property wealth in the UK is now owned by households where at least one occupant is 65 or older, and nearly one in 10 of 55- to 64-year-olds live in households with net property wealth of £500,000 or more; the highest of any age group.

Over 77% of 65 to 74 year olds are home owners (compared to 26% of 25- to 34-year olds). Today, the ‘grey pound’ accounts for some 76 per cent of the UK’s financial wealth, with a willingness to spend and a life expectancy significantly greater than previous generations (and arguably, in terms of home ownership at least, than the generation to follow).

This age group contributes £300 billion to UK economy and the growth in its spending (4.4%) is higher than in any other. The majority are property owners, who have paid off their mortgage, have largely weathered the downturn much better than younger generations. Those in retirement may have modest incomes, but they have relatively high assets, which tends to translate into higher feelings of prosperity.

When the time comes for individuals and couples within this demographic to consider residential care it is clear that the traditional, institutional care home that their own parents may have occupied simply won’t meet their expectations – and they have the assets to fund higher levels of care than that provided by the state.

Through its sale to residents of 5-star luxury care accommodation, and premier levels of service and care generating high weekly fees, the Borrowing Company’s homes are targeted at the affluent, self-funding market.

Sources: ONS, Experian, AgeUK, Alzheimer’s Society, Royal Geographic Society, Knight Frank, British Property Foundation, LaingBuisson, Somerset County Council

Projected 106% growth in UK over 85 population by 2030 (Source: ONS)

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Typically, developments are traditional Victorian period properties that have retained many of their original features and generous proportions, and have operated as care homes for many years. With a plentiful supply of dilapidated stock in the market at present properties are acquired vacant. Carlauren Developments Ltd (‘the Developer’) undertakes extensive survey and feasibility work to ensure each property is of sound overall construction and suitable for redevelopment and internal remodelling, typically offering 15-30 en-suite care studios. Properties are acquired in areas where market research and demographic data shows a high retired, affluent population.

Using a retained team of award-winning architecture, engineering and interior design consultants with many years’ experience in both the care and residential markets the Developer then renovates the property to a 5-star luxury standard - typically within a 4-6 month timescale - and relaunches it as a rebranded luxury ‘Care Community’ for fee-paying residents.

The refurbishment of well-built and vacant existing properties enables the Developer to get each property back on an operational footing and fee-generating in a fraction of the time of a new build development, usually without lengthy planning applications.

Where appropriate and commercially viable, additional new build facilities may be developed at the location (subject to planning approval), usually as a further phase of the development once operational.

Each property is acquired by a wholly-owned subsidiary of the Company (each being an SPV) with care and support services then provided by the Company’s care services business 5 Star Care Home Management Ltd, which ensures each development achieves full compliance with Care Quality Commission (CQC) and Gold Standards Framework reporting and the requirements of the Health & Social Care Act.

The business is currently recruiting a team of 40+ experienced care and support professionals - including

Developments

Images above: Latimer Lodge, Yeovil Care Community - one of the Company’s completed developments.

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Offering Memorandum | Luxury Care Homes Finance Plc | June 2Investment Overview | November 2001616

deputy home managers, duty managers, healthcare assistants and administration staff – to resource current developments as they near operational status.

Complimenting the luxury environment and excellent standards of care is a level of customer service normally seen in 5-star hotels, including fine dining, concierge, and a chauffeur-driven Bentley – an unique offering in the current care market and positioning each home as the premier care facility within its region.

Marketing strategies are developed for each care community to build awareness, interest and demand in the new facility among its target regional demographic. This includes PR support from the leading agency in the sector as well as dedicated websites, SEO, online, regional TV and radio advertising and social media / community engagement. Relationships are also built with local solicitors and GPs who are influencers and advisors to the target demographic on their choices in later life.

Retirees interested in living in one of the Company’s ‘Care Communities’ have the option of either renting their care studio under a standard Tenancy Agreement or purchasing it under a 125-year lease for an up-front price rather than paying the monthly rent. Short-term (respite) stays are also available. Other fees are also payable (service charge, restaurant services and the provision of personal/nursing care).

Step-by-step development process

Step 1: Due Diligence The Company acquires suitable properties in affluent towns and regions in the South/South-West of England. The Company undertakes constant monitoring of the care market and the availability of suitable properties and ensures that full commercial, technical and financial due diligence takes place on all potential properties.

Step 2: Purchase Following a satisfactory outcome of due diligence, and provided sufficient funds are available, investment monies are used to acquire the property.

Step 3: Development The properties are renovated into 5-star luxury care accommodation using permitted development rights where possible or the equivalent full planning requirements. The potential for extension works to existing properties and/or the construction of new build facilities to increase the number of care studios available on the site is always explored (usually as a ‘Phase 2’ project once the original property is fully operational and generating revenue).

Step 4: Operation, sales and lettings Upon completion of the renovation works the property is registered (or re-registered, as appropriate) with the Care Quality Commission (CQC) for the provision of residential, nursing and domiciliary care services. Comprehensive regional marketing and sales campaigns are then launched to secure sales and lettings on individual care studios and achieve/maintain target occupancy levels.

Income generationThe Company’s income is derived from:

1. The freehold purchase or lease of care studios to residents seeking high quality care accommodation in a luxuryenvironment, with excellent standards of care and support (purchase prices for care studios start from £109,950,with leases from £211.44 pw. It is anticipated that assisted living apartments will retail for £250,000+;

2. The fees generated from providing premium quality care, service and accommodation to residents of its home.Fees start from £1225 per week;

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Current developmentsThe Group currently has two developments underway – Yeovil and Hurst Manor Care Communities.

Phase 1 of Yeovil Care Community has seen the comprehensive redevelopment and fit-out of the former Latimer Lodge residential care home at Preston Road, Yeovil which opened in November 2016 with 13 luxury care studios for lease or purchase.

Phase 2 of the project will involve the extensive remodelling of the adjacent Tyndale nursing home with the demolition of a 1990s extension and the construction of a new two-storey extension to provide 32 nursing and dementia care beds. This Phase 2 development is subject to planning approval (submitted September 2016 with decision anticipated November 2016).

Both properties, which have been vacant since Autumn 2015, as well as a fully-occupied 14 unit sheltered housing complex, sit on a 1.8-acre site in the heart of Yeovil owned and operated by The Care Home Group subsidiaries.

Hurst Manor Care Community, is situated in the much sought after and well-regarded village of Martock, Somerset. This impressive Georgian Grade II-listed former care home offers accommodation for 36 residents over two floors within the substantial existing building and two award-winning extension wings. Having recently been acquired vacant by The Care Home Group the property will now undergo a luxury refit to deliver 30+ en-suite care studios, with the potential for further future expansion of the care community at this site.

Yeovil Care Community, Yeovil BA21 3AQ

Purchase price: £1,002,350*Development costs: £2,134,000*Total cost: £3,136,350*Income potential (sales): £4,467,000Income potential (fees): £3,604,750 p.a.* Phases 1&2. Phase 2 subject to planning approval

Hurst Manor Care Community, Martock TA12 6JU

Purchase price: £850,000Development costs: £1,154,395Total cost: £2,004,395Potential income (sales): £3,960,000Income potential (fees): £1,747,200 p.a.

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3. The fees generated from short-term (respite) stays where clients receive the same premium quality care,service and accommodation as permanent residents, for a defined period. Fees start from £205 per night.

4. The increase in the value of land and property following redevelopment (and potential extension).


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Dining and Lounge area, Latimer Lodge at Yeovil Care Community

Our investment opportunity: Leasehold purchase & lease-back

The leaseholds of individual care studios within our development portfolio can be purchased by investors at a discount on their full retail price.

Once purchased, we will lease-back the care studio from you for a price equal to 10% of the purchase price PA.

When our luxury refurbishment works are done, each property is relaunched with comprehensive regional online/offline marketing campaigns, and operated by our experienced care services business, 5 Star Care Home Management.

With their luxurious interiors and premium-level fees, our care communities are clearly positioned as the premier care accommodation within their region, and targeted at self-funding, high net worth individuals and couples who can choose to either lease of buy their care studio.

When we have a resident for your care studio, we’ll buy it back from you for a 10% premium on your initial investment, giving a quick, healthy return on investment. We also offer a 110% buy-back guarantee in Year 5, or 125% buy-back in Year 10, in the unlikely event that we haven’t sold the studio by then.

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£90,965

* Discounted investor prices from £90,965.

** Assured net yield paid monthly over a 10-year initial agreement. After Year 10 we will renew our agreement on a year-by-year basis.

*** The Care Home Group may buy back the lease at any time for the sum equal to the purchase price paid by the investor plus a 10% premium. During Year 5, The Care Home

Group offers a guaranteed buy-back at a 10% premium on the purchase price, with a 25% premium buy-back guaranteed in Year 10. Potential annual return and yield

based on the investor purchase of one care studio, its subsequent buy-back by The Care Home Group, and the investor purchase of a further one care studio per annum, plus

12 months’ annual interest paid at 10% PA.

Typical discounted purchase price of individual care studio*

£9,096.5010% net income per annum through lease-back to us

Revenue forecast

£18,193Potential return through 10% buy-back of your care studio by us***

Net yield potential

20%


Care Studio 8, Latimer Lodge at Yeovil Care Community

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&

Enjoy continuing returns through retail buy-back• Receive a 10% return on your initial investment via buy-back

when we secure a resident for your studio

• Guaranteed 110% buy-back in Year 5 and 125% in Year 10

• The opportunity to purchase further care studios within ourdevelopment portfolio, ensuring a continuing ROI

1. Purchase a specialist care studio • Investor-discounted prices from £90,965

• Reserve for £2,000 per care studio

• Closing fees held with UK lawyers until completion (within28 days of reservation)

Sit back and enjoy a hassle-free investment• Lease the care studio back to us for a 10% PA fixed return

• Rental income paid monthly into your chosen bank account

• The property is renovated to a 5-star luxury standard andruns by our experienced care business for self-fundingresidents

2.

3.

Our investment opportunity: A simple three-step process

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What is a care studio?

Care studios are generously proportioned and newly renovated en-suite living spaces, designed to make life easier for residents.

Beautiful and luxurious interiors have been created by interior design specialists with over 20 years’ experience of creating high quality, comfortable and homely environments specifically tailored to the needs of those in later life.

Care studios are provided fully furnished and ready to occupy, with our ‘Spring’, ‘Summer’ and ‘Autumn’ colour schemes giving each space an unique look and feel, complemented by high quality furniture, fabrics, prints and accessories.

All studios also feature a fridge, plasma TV, WiFi and wireless nurse call system.

Care Studio 1, Latimer Lodge at Yeovil Care Community


Completed developments: Latimer Lodge, Yeovil Care Community

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Latimer Lodge is a beautiful Victorian villa built as a family home in 1889, and extensively renovated and extended to become Latimer Lodge residential care home between 1991 and 2015.

The home was purchased vacant by in April 2016 and underwent extensive refurbishment works which were completed in October 2016. Major works have included structural modifications to create open and welcoming reception and communal areas, as well as a new lounge

area at first floor level. All care studios now have en-suite wet rooms.

The interior design scheme for Latimer Lodge sets the standard for all future developments, with premium quality furniture, fabrics and fittings creating a beautiful and luxurious environment for our residents.

Latimer Lodge officially opened in November 2016 with a series of open days and community events and an extensive regional marketing plan now underway to build occupancy and local profile.

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Tyndale House stands adjacent to Latimer Lodge at our Yeovil Care Community site.

The impressive house was originally built in 1902 and converted into a nursing home in the mid-1980s, with further extension works taking place in the 1990s. The home closed in 2015 and was acquired by The Care Home Group in April 2016.

A planning application is now lodged with Somerset County Council for an exciting new build development at Tyndale, involving the retention and renovation of the original house (Phase 1) and the demolition/replacement of its dilapidated extension with a two-storey new build facility creating a 32-bed nursing home (Phase 2).

Its external design will be sympathetic to the Victorian architecture of the original house and the adjacent

Latimer Lodge. Internally luxury interiors will be created by experts in elderly and dementia care design, ensuring we provide a 5-star environment that caters for residents with specialist needs.

A final decision on planning is anticipated in November 2016 and pre-application discussions with the Council’s planning and conservation officers have been very favourable.

When our Tyndale development is completed (expected to be summer 2017) our Yeovil Care Community will cater for around 60 residents and provide the full range of care services for residents over 65, from assisted living at Coverdale Court, to residential care at Latimer Lodge and nursing care at Tyndale House.

Care studios at Phase 1 of Tyndale House are now available to investors - see floor plans opposite.

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Current developments: Tyndale House, Yeovil Care Community

Up-to-date availability and price list available on request

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Phase 2: New-build extension (24 care studios) Phase 1: Refurb (8 care studios)

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First Floor(548sqm)

Second Floor(344sqm)

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Situated in the delightful and affluent Somerset village of Martock, Hurst Manor is a Grade II listed Georgian property built in 1828 faced in fine local ham stone ashlar with Welsh slate hipped roofs.

Having traded successfully as a care home for the past 20 years, the property has been acquired vacant by The Care Home Group, and will now undergo a sensitive re-fit to offer new residents a stunning, peaceful and traditional setting in their later years.

Our development team are currently liaising with the local authority’s planning and conservation officers, English Heritage and other parties to ensure that our proposals deliver a sympathetic and sustainable redevelopment of the listed property and its grounds.

Refit works will reinstate the grandeur of the property’s reception and communal areas and create 30+ luxury, en-suite care studios furnished with high quality fixtures, fittings and fabrics in a traditional setting.

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Current developments: Hurst Manor Care Community, Martock

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Up-to-date availability and price list available on request

Investor FAQs

Q. Why should I invest in the UK care sector?A. With the number of elderly people with high care needsexpected to increase significantly over the next 20 years,there is growing demand for modern, fit-for-purpose carehomes, funded by private investment. Between 2012-32 thepopulation of over 85s (the primary users of care homes)is expected to increase by 106%, and the total number ofolder people with care needs is expected to increase by over60%.1

Q. How is the sector performing at present?A. Homes which cater for privately funded residents, mainlyin more affluent areas of the UK such as the south-east andsouth-west of England (where around half of all residentsare self-funding) are performing well. Research by KnightFrank2 identified over a third of care homes assessedgenerating EBITDARM as a percentage of income in excess of30%, with 9% generating profit margins of 40% or more. Incontrast, poorly performing homes - generally more relianton local authority funding which has reduced in real terms inrecent years - are generating EBITDARM of 10-15%.

Q. Why should I invest in refurbished traditional propertiesrather than new build?A. Typically, our projects are traditional Victorian periodproperties that have retained many of their original featuresand generous proportions, and have operated as carehomes for many years. We renovate them to a 5-star luxurystandard - typically within a 3-4 month timescale - andrelaunch them as luxury homes for fee-paying residentswho then buy or lease their care studio, care and supportfrom us. As we are refurbishing well-built, vacant propertieswe are able to get them back on an operational footingand fee-generating in a fraction of the time of a new builddevelopment, usually without lengthy planning applications.There are an estimated 80,000 units in current care homestock that are reaching obsolescence1, so refurbishmentopportunities are plentiful.

Q. What’s a care studio?A. A care studio is a well-proportioned en-suite living spacein our refurbished homes, designed to make life easier forthe resident and take away the everyday hassles associatedwith living at home in later life. With interior design byleading care specialists particular attention has been paidto ensuring that safety features are incorporated, andconsideration given at all times to the needs of those withmobility issues. Studios are provided fully furnished andready to occupy, with a selection of colour schemes givingeach space an unique look and feel, complemented by highquality furniture, fabrics, prints and accessories. All studiosalso feature a fridge, plasma TV, WiFi, nurse call system andtablet.

Q. How does the investment work?A. You purchase the 125-year leasehold of a care studiowithin our care home portfolio, at a discount on its full retailprice. We will then lease-back the care studio over 10 yearsfrom you for a price equal to 10% of your purchase price perannum. We will also market your care studio for residentialsale, and buy-back the care studio for a 10% premium whenwe have secured a buyer, giving a quick, healthy return oninvestment.

Q. Who will run the homes?A. Care and support in our homes is provided by 5-Star CareHome Management Ltd, a wholly owned division of TheCare Home Group. Its management team have all gainedfront-line experience in a variety of adult care settings,including specialist mental health and dementia facilities.As Registered Managers and Nominated Individuals for anumber of large homes and major providers they havegained invaluable experience spanning more than 35years managing well-performing residential, nursing anddomiciliary care teams and running profitable businesses,achieving full compliance with Care Quality Commission(CQC) and Gold Standards Framework reporting and therequirements of the Health & Social Care Act. Supportingour in-house team is a partnership with a major UK careservices provider which is providing additional senior levelsupport and consultancy around compliance, HR and QualityAssurance.

Q. You are a new company, what reassurances do I havethat my investment is safe?Every company is new at some time, but we appreciate thatthis is bound to raise some concerns until we build a trackrecord as The Care Home Group. Nevertheless, our seniormanagement team each bring 15-20+ years experience inareas such as construction, property development and realestate investment, as well as managing successful and fully-compliant residential, nursing and dementia care facilities forother major providers. Our team bring this track record to amarket where there is clear evidence of a increasing growthin demand for accommodation over the next 20 years, aswell as the profitability of care facilities catering for self-funding residents.

Q. What’s different about The Care Home Group?A. There are of course other purchase and lease-backinvestment opportunities on the market, including thoseon individual rooms. We feel we are unique because we’redeveloping homes to a 5-star luxury standard not currentlyoffered to the investment market. As well as outstandinglevels of care, we offer residents a level of service normallyseen in a 5-star hotel including concierge, room service andfine dining. Our homes are targeted at privately funded

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residents and will be the premium care location in their region. Unique to our investment proposal is the opportunity for investors to benefit from the residential sale of their care studio to a resident, delivering a 110% return and the ongoing opportunity to continue investing with us, enjoying 10% PA rental income from us plus a 10% return from any residential sale.

Q. What happens if you go bust?A. You own the 125-year lease and full legal title to yourcare studio and that would still be the case if The Care HomeGroup no longer existed. The most extreme outcome wouldbe for new owners to appoint a new management companyto operate the home or sell it to another care homeoperator. The more likely scenario is that The Care HomeGroup would appoint another manager to run the home. Thefreehold of each home is owned by one ‘land’ company andoperated by a separate ‘operating’ company so our companystructure gives lots of inbuilt protection.

Q. What happens to the money I invest?A. The money you invest with us will contribute towardsthe cost of property acquisitions and refurbishments, andmaintain the premium standards of care and support wedeliver to residents of our homes when operational.

Q. Is there rental assurance?A. Yes, the first 10 years is assured minimum 10% net yield.

Q. Can I visit your site(s) before I invest?A. Of course. If you like to make a visit please speak with ourteam on +44(0)1935 388654.

Q. What happens if/when my care studio is sold to aresidential buyer?A. You receive a 10% return on your initial investment. Youcan then choose to reinvest in further care studios withinour portfolio, at a discounted price, and enjoy continuingretail sale returns. Investors are free to sell their care studiothemselves at any time after exchange of contracts.

Q. What happens if you don’t sell my care studio?A. You continue to receive a minimum fixed 10% return perannum - this is paid regardless of whether the care studio isoccupied or not. In Year 5 we offer a guaranteed 110% buy-back in the unlikely event that we haven’t sold the studio bythen, with a 125% buy-back in Year 10.

Q. When and how is my rental income paid?A. Rental income is paid monthly, in advance, into yourpersonal Care Home Invest account. This can then bewithdrawn or transferred into your designated bank orPayPal account.

Q. What happens after 10 years?A. You purchase a 125-year lease on the care suite, so afterthe 10-year leaseback period (if we haven’t sold your studio)we will renew our lease-back arrangement with you on ayear-by-year basis. Alternatively you can choose to sell yourinvestment on the open market.

Q. How can you back up your 5- and 10-Year buy-backguarantee?A. We will utilise a sinking fund to cover buy-backs throughthe profits from operating the homes and also sale of unitsto residents. The aim being the sale of units to residents inplace of investors – sales proceeds could be ring-fenced if notto an investor to provide scope for repayments.

Q. How care studios sold to residents? Why would they buy acare studio?Our residents have the option of either renting their carestudio under a standard Tenancy Agreement or purchasingit under a 125-year lease for an up-front price rather thanpaying a monthly rent.

Under the current means-testing system in England, if a person has savings and assets worth more than £23,250 they will need to pay the full cost of their personal care, including accommodation costs. This is called self-funding. For many people, this will mean using their assets, savings and perhaps selling their current home to fund their care.

Using some of those savings, or the equity released from the sale of property, for the purchase of a care studio with us means that a resident can enjoying around-the-clock care in the privacy and comfort of their own care studio home, and still have a property asset to pass on when they’re gone. We offer a guaranteed ‘buy-back’ of the care studio when it is permanently vacated.

We strongly advise all our residents to take independent financial advice from qualified advisors, such as members of the Society of Later Life Advisors before they decide whether to buy or rent with us.

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