Target Healthcare REIT acquisition of care home in Merseyside for £6.9m
Target Healthcare, a UK listed specialist investor in modern, purpose-built care homes, has announced that it has completed the acquisition of a property in Formby, Merseyside for approximately £6.9 million, including transaction costs.
The home, which fully meets the Group’s strict care home investment criteria and opened following development completion in late 2017, comprises 40 bedrooms with full en suite wetroom facilities. The home is well on the way to mature trading which will allow good rent cover soon after completion. It is situated in central Formby and is well equipped with modern facilities typical of the Group’s existing portfolio, including large light-filled lounges and dining rooms, and pleasant gardens with direct access from several ground floor rooms.
The investment is underpinned by supportive fundamentals. Formby, which sits on the coast just north of Liverpool, is an affluent area with a shortage of alternative care options.
The home is let on a 35 year lease with an RPI-linked cap and collar to Athena Healthcare group. Athena has two other homes under lease and two further under forward fund agreements with Target Healthcare expected to complete later in 2019; in total they have six operating homes and six others in development. The yield on acquisition is consistent with the overall yield in the THRL portfolio and, as the home is already trading, there is no rent-free period.
John Flannelly, Head of Investment at Target Fund Managers, commented:
“This represents another high standard addition to the portfolio, in an area with a shortage in provision of quality care homes. It allows us to continue to support the development of homes by the Athena Healthcare team, who have demonstrated a commitment to providing the best standard of care, in line with our ethos.
“We currently have a number of other acquisitions in advanced due diligence, as well as a large pipeline of transactions in earlier stage assessment, and expect to make further announcements in the near future.”