11th Feb 2016 08:54
LONDON (Alliance News) - Target Healthcare REIT Ltd, which invests in UK care homes, on Thursday said it has agreed to buy a 12-bed specialist care home in Bricket Wood, St Albans, England for about GBP2.3 million including acquisition costs.
The London-listed real estate investment trust said the care home is a former National Health Service clinic, which has been re-designed and extensively refurbished.
The care home is made up of three linked bungalows, each with four bedrooms, en-suite wetroom showers, an open-plan resident day room and kitchen facilities, and staff accommodation.
Outside, there are landscaped gardens as well as staff and visitor parking.
The transaction represents a net initial yield in excess of 7%, and the rent payable under the lease is subject to "upwards-only annual uplifts" in line with the retail prices index, subject to a cap and collar.
The care home will be leased back to specialist care provider, HSN Care for 50 years, when the group completes the acquisition upon expiry of a planning judicial review period in March.
As part of the deal, Target Healthcare has agreed to provide a short-term loan facility to HSN.
That will fund the land acquisition and refurbishment of the property. HSN will be responsible for any delays in timing or cost overruns.
The loan facility attracts an accrued coupon of 8.85% per annum. The loan capital and interest payments will be repayable from the payment proceeds once the acquisition completes.
"We are delighted to announce the acquisition of this care home, adding as it does another quality property to the group's portfolio in a southern location as well as further diversifying the tenant base," Kenneth MacKenzie, managing partner of Target Advisers LLP, said.
"The group is working on a number of opportunities and we hope to announce further acquisitions in the coming months," MacKenzie added.
Shares in Target Healthcare REIT were up 1.1% at 109.12 pence on Thursday morning.
By Samuel Agini; [email protected]; @samuelagini
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