no buyers, page-13

The RAD is refundable but as you can imagine most people leave when they pass away. This is not a rush at once. As this turnover happens (average is 2.7 years in the industry), the property may get a small upgrade and then sold again at a higher RAD. If they don't pay the RAD, they pay the DAP, capped at 6.22% and regulated by the government. Obviously if the company can raise money at say 4% and charge at 6.22% that is the margin.

The other money maker is the care side but the figures around this are hard to judge as this is virtually all regulated by the govt and payments are part subsidized by them also so as to the margins on this it's hard to tell.

REG compared to others mainly holds on DAP (or building cost) debt on their balance sheet. The others hold debt on their companies goodwill which could cause problems in a downturn as goodwill can't fund interest costs but at least for every DAB you have you are guaranteed to get 6.22%. DAP is like a mortgage interest payment so not refundable.

The stricter laws on charges from an industry expert told me this simply means lower end homes will not be built as these are price controlled by the govt. higher cost beds will be built in the main now as they can charge premium outside of govt control and thus fund the cost of improvement in the capital value rather than a regular annual fee.

This will simply lead to high value in the beds long term as less beds at the lower end are built and the industry as it is is stretched to keep up with demand. A few years back an analyst said, we need a new facility with 40 beds opening every Monday for the next decade to keep up with demand. Anything to hinder this will only help the ones already established.

DYOR