January 17, 2019 Finance

Octopus Healthcare raises further £133.5m for care home fund and acquires seven assets

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Octopus Healthcare, part of the Octopus Group and a leading investor in healthcare facilities throughout the UK and Ireland, announces that it has raised a further £133.5 million for its Octopus Healthcare Fund (the Fund) and, separately, has also agreed to acquire seven care homes. This latest fundraising, from new and existing institutional investors, takes the total equity raised for the Fund to £320 million since its launch in August 2017.

Octopus Healthcare Fund has agreed to acquire a portfolio of six modern, purpose-built care homes let on long leases to Care UK, the UK’s largest independent provider of health and social care, for approx. £110 million. The assets are located in Banbury, Cheltenham, Horsham, Norwich, Ware and Witney. This acquisition builds on Octopus Healthcare’s existing partnership with Care UK, which now encompasses a total of 8 care homes across the UK. Care UK was represented by CBRE throughout the transaction. In addition, the Octopus Healthcare Fund has agreed to forward fund the development of a new elderly care home in the Midlands to be leased to a national operator.

All seven assets have been designed to provide best-in-class support and care for the elderly in locations where there is strong demand for beds. These acquisitions will take the Fund’s total portfolio to 26 care homes.

Ben Penaliggon, Director at Octopus Healthcare, commented: “This significant new capital raise for the Octopus Healthcare Fund and the acquisitions we have announced today are a strong endorsement of both our ability to source and acquire high quality UK care homes, of the appeal of this asset class to investors, and the highly supportive demographic trends that drive it. This marked the end of a successful year for the Fund, during which it has secured over £279 million of transactions into the UK elderly care home sector and we look forward to continuing to build the Fund’s portfolio through a combination of standing investments, forward fundings and forward commitment acquisitions.”

Hiti Singh, Head of Institutional Investment at Octopus, said: “The strong fundamentals of healthcare infrastructure investment, including the sustainable, inflation-linked income, risk-adjusted returns and supportive demographics, continue to attract institutional investor demand. 45% of investors in our recent Healthcare Infrastructure survey indicated that they lack the investor skills and resources to invest in this asset class.[1] This creates an opportunity for us to build on our long-standing track record in this area and unlock an opportunity for investors who have an appetite to increase their allocations in healthcare infrastructure.”

Octopus Healthcare Fund invests in modern, purpose-built, care homes for the elderly in the UK. The team has a long standing 13-year track record of investing in healthcare real estate and is complemented by an in-house clinical assurance team which provides occupiers with access to the latest regulatory information and best practices. In addition to UK care homes, the Fund also has the ability to invest in specialist healthcare facilities.

Visit octopusgroup.com.

[1] Based on 65 healthcare infrastructure investors with a total survey size of 100 institutional investors with $6.8 trillion AUM

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