Children's care home expansion: collaboration agreement with investor capital
A Gateshead children's care provider growing site by site through SPVs, with landlord investors providing the property and a capital advance in return for a share of profits
By Malcolm ZoppiHealthcare
Key facts
- Deal type
- Commercial contracts
- Acting for
- The company
- Business
- Children's care home operator, Gateshead
- Sector
- Healthcare
- Deal value
- Not applicable
- Structure
- Contractual collaboration agreement with landlord investors; one SPV per site, a lease of the property and a capital advance in return for a share of that site's profits
- Timescale
- Options advice, then implementation of the chosen structure
- Completed
- Summer 2026
- Lead solicitor
- Malcolm Zoppi
At a glance
A Gateshead company operating several children's care homes wanted to expand by partnering with property owners rather than buying properties itself. We advised on the options for bringing in landlords as partners and then implemented the structure the client chose: a collaboration agreement under which each new site is run through its own SPV, the landlord investor grants a lease of the property and provides a capital advance, and in return receives a percentage of the profits that site generates. The work completed in the summer of 2026.
The client and the objective
Children's care homes need suitable properties and capital to open. The client wanted to grow site by site, without giving away ownership of its core business or taking on property purchases and conventional debt for each new home.
The options we considered
- Offering the landlords shares in the operating company.
- Borrowing from the landlords under a loan.
- A corporate joint venture for each site.
- A purely contractual collaboration agreement.
Each option was weighed for control, cost, complexity and what the landlords would actually be getting. The client chose the collaboration agreement.
The structure
One SPV per site
Each new home is operated through its own special purpose vehicle. That keeps each site's income, costs and obligations separate, protects the rest of the group if one site struggles, and makes the profit share for each landlord easy to calculate.
Lease plus capital advance
The landlord investor grants the SPV a lease of the property, so the home has secure occupation, and provides a capital advance to fund the set-up. In return the landlord receives a percentage of the profits generated at that location, rather than shares in the business.
Why contractual rather than equity
Giving landlords shares would have diluted the owners and given outside investors rights over the whole business. A loan would have added fixed repayments regardless of performance. The collaboration agreement aligns the landlord's return with the success of its site, while the client keeps full ownership and operational control.
Outcome
The collaboration structure was in place by the summer of 2026, giving the client a repeatable model for opening new homes with landlord partners.
What this deal shows
- Investors do not have to become shareholders; a contractual profit share can achieve the same alignment.
- An SPV for each site keeps risks and returns separate and easy to account for.
- Looking at all the options before choosing one is what gets the right structure.
“The client wanted to grow without giving away its business. A contractual profit share with each landlord, site by site, let it do exactly that.”