Social Infrastructure · Hospitals

What pays for a hospital, and how stable it is

An NHS hospital PFI splits the asset from the care: the investor funds the building and maintains it, and is paid a long, government-backed, inflation-linked unitary charge for availability and hard FM, paid whether or not every bed is full, while the clinical services stay public. On top sits the soft FM (cleaning, catering, portering) and car-park income that flex with how busy the hospital is. The availability charge is the rock-solid core; activity adds a services kicker. The case turns on the size of the estate, the charge, and bed occupancy.

800
£75k
90%
LIVE
Occupied ward patient in, soft FM in use Available bed funded whether filled or not Soft FM & car park cleaning, catering, parking Unitary charge paid at the main entrance
Flows, annualised from current assumptionsper year
Revenue p.a.
£0
£0 / hr
EBITDA p.a.
£0
0% margin
Revenue / bed
£0
unitary + services
Beds occupied
0
90% occupancy
Stocks: what the flows accumulate intolive
Beds occupied now
0
of 800 beds
EBITDA banked · session
£0
accumulating in real time
Implied enterprise value
£0
at 16× EBITDA
Where revenue comes from Total £0 p.a.
Availability & hard FM
Soft FM & car park
Why investors like hospital PFI: the unitary charge is one of the longest, largest and most secure income streams in infrastructure: a 25–35 year, sovereign-backed, inflation-linked annuity for the availability of the building, paid by the NHS regardless of how many beds are full. That contracted core supports very high leverage and low, stable equity returns. The soft-FM and car-park layer flexes with hospital activity, adding a modest kicker. The real risks are operational (availability and FM-performance deductions) rather than demand.
Revenue streams£0 p.a.
Operating costs£0 p.a.
Investment case: should you buy it?DCF returns

Year-1 financials flow live from the simulation above: revenue £0 and EBITDA £0 p.a. Set your deal terms below: the unlevered IRR (asset return) and levered IRR (return to equity, after debt) recompute instantly.

Operating

%
%
%
%
%
%

Valuation & hold

×
×
y

Financing

×
%
%
Unlevered IRR
—
asset / project return
Levered IRR
—
return to equity
Equity multiple
—
MOIC over hold
Equity gain
—
exit equity − invested
Equity cash-flow profile£m · ■ invested   ■ returned
Projection, £m per year

Illustrative model. Represents an availability-based NHS hospital PFI/PPP. Revenue = a contracted unitary charge for availability & hard FM (beds × charge, paid regardless of occupancy) plus soft-FM services (cleaning, catering, portering) and car-park/retail income that scale with bed occupancy. Operating costs (hard FM & lifecycle, soft-FM staffing, energy & utilities, insurance & SPV, a management fee) are part fixed (per bed) and part activity-driven, so the unitary annuity is a stable high-margin core while soft-FM revenue and cost flex together. Clinical services are provided separately by the NHS and are not part of this model. EBITDA = revenue − operating costs; excludes upfront construction capex and senior debt service. The investment case is a simplified DCF. For illustration only, not investment advice, and not any specific asset.