The problematic differentiation between property bonds and leases in healthcare provision: A Southern Cross case study

Research output: Contribution to journalArticlepeer-review


Colleges, School and Institutes

External organisations

  • University of the West of England


Purpose – There are some 487,000 places in long-stay residential care and nursing homes in the UK representing an industry worth some £15.2 billion per annum. Creating leases with guaranteed rental uplifts, a property bond in all but name, now attracts significant investment into healthcare. This is argued to be unsustainable, as evidenced by the collapse of Southern Cross Healthcare. The purpose of this paper is to provide insight into institutional investment for sustainable healthcare provision. Design/methodology/approach – It is carried out via a range of unstructured and semi-structured interviews with a purposive sample of a small elite of professionals involved at the summit of this investment market and analysis of secondary literature concerning the wider international property market regarding the way in which advisers and investors view the security and value of these new instruments. Findings – It is found that the differentiation between rental growth and indexed rental uplifts reveal a misunderstanding of the nature of the investment vehicles currently being marketed. Practical implications – The implication of the research, is that much modern private healthcare provision is financially unsustainable, as has begun to be recognised in recent government regulation and guidance. Originality/value – This research provides new and original insight into institutional investment for sustainable healthcare provision.


Original languageEnglish
Pages (from-to)83-94
Number of pages12
JournalProperty Management
Issue number1
Publication statusPublished - 16 Feb 2015


  • Asset valuation, Finance, Healthcare, Investments, Property development