27th Jun 2024 10:03
(Alliance News) - Target Healthcare REIT PLC said it has sold four UK care homes for GBP44.5 million to the incumbent tenant.
The London-based real estate investment trust, which specialises in care homes, said the same price reflects a "modest premium" to the portfolio's carrying value at the end of 2023 and on March 31. It added that they have an implied net initial yield of 5.6%.
Proceeds will be used as a partial repayment of the company's revolving credit facilities and therefore reduce its unhedged interest cost.
These assets were originally constructed in 2007 and 2008, and were amongst Target Healthcare's oldest assets in its portfolio.
"These care homes have been a successful investment for the group, delivering a consistent and attractive rental yield over the period of ownership, combined with the realisation of a capital uplift on disposal. We care deeply about the quality of our assets and the services they facilitate; however we are not unduly attached to holding onto the bricks and mortar where we identify opportunities to improve both the overall portfolio and the group's capital structure," said Scott Steven, head of Asset Management at Target Fund Managers.
"This disposal is a clear illustration of our ability to pro-actively manage the portfolio to provide an attractive and sustainable level of income, together with the potential for growth, from our diversified portfolio of modern, purpose-built care homes."
Shares in Target Healthcare REIT were up 0.9% to 78.69 pence each in London early Thursday.
By Sophie Rose, Alliance News senior reporter
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