February 5, 2019 Property

Aedifica completes the acquisition of the portfolio of 92 healthcare properties in the UK

Aedifica has recently completed the previously announced acquisition of a significant UK healthcare real estate portfolio. The contractual value[1] of the portfolio amounts to approx. £450 million. This transaction marks Aedifica’s entry into the United Kingdom, which is one of the largest markets in Europe with attractive fundamentals supporting healthcare real estate.

The Aedifica UK portfolio [1]consists of 92 healthcare properties[2], in 90 locations, with a total capacity for more than 5,700 residents. These largely purpose-built care homes offer a 100% single bedroom ratio and above market average care quality ratings. The portfolio offers good geographical diversification with locations all across the United Kingdom. The portfolio also offers the potential for further improvement through ongoing and identified extension and upgrade projects.

The Aedifica UK portfolio has a diversified tenant base of 14 well-established operators. The leases in this portfolio are inflation-linked triple net leases with a weighted average unexpired lease term of more than 22 years. The initial gross yield amounts to approx. 7 %.

Aedifica will manage and expand its UK portfolio with the support of Layland Walker that has been providing portfolio management services for this portfolio during the past five years. Layland Walker will offer its services exclusively to Aedifica. The Layland Walker team consists of seven experienced professionals dedicated to this portfolio and maintains long term working relationships with the tenants of the portfolio and the UK healthcare market.

Stefaan Gielens, CEO of Aedifica, commented: “Conditions have been fulfilled for Aedifica’s largest acquisition to date. Aedifica has acquired a significant healthcare real estate portfolio including 92 properties in the United Kingdom. By entering the UK market, Aedifica adds a fourth country to its portfolio and anchors its strategy as a pure play investor in European healthcare real estate. The United Kingdom provides an attractive investment opportunity for Aedifica, since the healthcare market is still very fragmented and the ageing population leads to increasing demand for care assets. Moreover, given current market conditions, Aedifica has acquired this portfolio at a discount as compared to the independently appraised fair value of the buildings. This transaction, in combination with our pre-let development pipeline, further establishes Aedifica as the market reference in listed European healthcare real estate.”

The completion of this transaction is financed through existing and new debt facilities. This acquisition increases Aedifica’s debt-to-assets ratio by approx. 10 percentage points.

This UK portfolio fits perfectly with Aedifica’s pure play European healthcare real estate investment strategy and its current portfolio. This deal further diversifies the Group’s geographical spread and tenant base, and strengthens the exceptional WAULT of Aedifica’s

[1] The contractual value complies with the provisions of article 49 § 1 of the Belgian Act of 12 May 2014 on regulated real estate companies.
[2] One small care home (contractual value: approx. 1 million £) of the previously announced 93 care properties was sold on 29 January 2019 to its tenant that exercised its pre-emption right.

Vivien Shepherd
viv@healthcarebusiness.co.uk

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