What NOI is actually measuring
PBSA operating costs and NOI are the income quality file. A valuer capitalises net operating income. A lender stresses it. An owner lives with the cash that is left after the operator, the utility bills, and the repairs that cannot wait.
A scheme in Birmingham with on-site staff and all-inclusive utilities will not have the same cost book as a smaller block in Sheffield with a lighter service. There is no national cost-per-bed figure on this page for that reason.
UK coverage: 1,849 active schemes across 78 cities (62 cities with a hub page). As of 20 October 2026. These are PBSAX coverage figures, not a national census. See PBSA news for the dated snapshot, and city pages under UK PBSA.
Rebuild the cost book
Start from contracted rent, then take off voids and credit loss to get effective income. Then subtract the costs of running the building and the letting. Read the management agreement for what the fee includes. Occupancy and direct-let versus nomination sit on PBSA occupancy.
| Line | What to confirm |
|---|---|
| Income | Gross potential rent, voids, credit loss, and any commercial income. |
| Operator cost | Fee, staff recharge, and what is included versus extra. |
| Building cost | Utilities, insurance, cleaning, security, and planned maintenance. |
| Letting cost | Marketing, commissions, and bad-debt handling. |
| Compliance | Fire, safety information, and code membership costs. |
| Reserves | Whether sinking-fund cash is inside or below the NOI you are valuing. |
How that income is capitalised is in the valuations guide. How lenders treat it is in PBSA financing. Dated coverage is on PBSA news.
What sits below NOI
Fire or building-safety works, plant replacement, and furniture cycles are usually capital items. If you capitalise an NOI that ignored a known works programme, you have overstated value. Safety duties are on building safety. Return concepts sit in PBSA investment.
Do not import a percentage from another scheme’s brochure. The only defensible book is the one attached to this asset.
Sources
FAQs
What is NOI on a PBSA scheme?
Net operating income is effective rental income after the costs of running the building and the letting operation, before debt service and most capital expenditure. Valuers capitalise that income. Lenders stress it. It is not the same as cash after capex or tax.
What usually sits in operating costs?
Operator or management fees, staff, utilities, insurance, cleaning, security, marketing, compliance, and day-to-day repairs. Reserve or sinking-fund contributions may sit beside NOI rather than inside it — read how the valuer and the lender define the line.
Can I use a national cost-per-bed average?
Not for a bid. Costs follow specification, city utilities, staff model, and the management agreement. Rebuild the lines from invoices and the operator budget for that scheme.
How do nominations change NOI?
A take-or-pay nomination can floor income on a tranche of beds. It does not remove operating costs on those rooms. Model nominated and direct-let income separately, then apply the same cost book.
Where does capex sit?
Plant replacement, fire or building-safety works, and FF&E cycles are usually below NOI. Ignoring them overstates the income you can capitalise or gear.