Community connections: Chippenham care home visit

On a drizzly October morning, we popped out of the office and headed over to Chippenham to visit a local care home property, one of around 85 care homes in the Octopus Healthcare Fund (OHF), to which we have a £10.6m commitment through our Brunel property portfolio.

The Flowers Manor care home is a 66-person occupancy home, providing residential care with a floor dedicated to offering support to individuals with dementia.  It is a relatively new facility, having opened in September 2021 and swiftly reaching close to full occupancy.  The home is a premium facility, with lovely grounds, thoughtfully designed common areas, and comfortable ensuite rooms.

We were privileged to receive a tour of Flowers from Esther, the general manager.  Esther is an inspiring individual, who spoke passionately about the care provision and her team of staff.  This is not a sector that commands high wages, but Esther had staff morale high on her agenda, and it was clear that a steady supply of sausage rolls was key to maintaining morale at an elevated level!

During our tour we could see that the comfort and wellbeing of the residents is top priority.  Esther led us through the dining room, outdoor space, garden room, cinema, library, and the second-floor "sky bar" - a cozy room with a bar looking out over Chippenham, and apparently very popular with the residents!

We reconvened in the garden room for a cup of tea, and a chance to ask questions of the Head of Care Homes at Octopus, Michael Toft. We learned that OHF has a three-part assessment of potential investments, covering clinical, ESG (environmental, social and governance), and financial criteria.  A clinical team visit every site in the portfolio once a year to ensure that high standards are being maintained. 

Michael explained that Flowers had been let to the operator on a 35-year lease, and the rental income from the operator was generating us a return of  >7%.  Rental increases are capped across the portfolio at 4-5%, which has helped to soften the impact of the cost-of-living crisis.  OHF had forward funded the construction of Flowers, investing at a point when planning was already granted, and the contract agreed with the developer.  This model, in place across most of OHF's investments, means that Octopus have more influence over the quality of construction, without taking on development risk.

This led nicely into our next question, around the sustainability of the development.  Flowers is undeniably efficient, with under-floor heating powered by ground-source heat pumps.  Currently it is only feasible to make care homes operationally net zero through offsetting, which is being explored, but this needs to meet high standards of sustainability and transparency to be a viable option.  Octopus are aware that more needs to be done in this area, and we were reassured that it was on their agenda.

Our educational visit to Flowers served as a poignant reminder of the significance of these spaces in people's lives, and we are pleased that through our diversified property portfolio we are able to earn financial returns for our beneficiaries, whilst contributing to an increase in the care provision in the local area.