15th Sep 2016 16:34
LONDON (Alliance News) - Specialist Investment Properties PLC on Thursday said it has acquired 12 flats in Staffordshire for a total of GBP1.3 million and, in a separate deal, purchased a further 16 flats in Cumbria for GBP2.3 million
The company said all the flats in Fazeley, Staffordshire, have one bedroom and provide living accommodation for adults with learning difficulties.
SL Boathouse Ltd, a subsidiary of the company, will lease the flats to Inclusion Housing Community Interest Co on a 25-year, inflation linked, full-repair and insuring lease. Completion should occur on September 26.
Inclusion Housing is an established housing association responsible for providing accommodation for adults with learning difficulties. Midway Care Group will be the care operator for the Property and will enter into an agreement with Inclusion Housing to underwrite any rental voids in the first five years of the lease.
Notably, Midway Care owns 50% of Midcroft Care Ltd, which sold the flats to Specialist Investment.
The total consideration is GBP1.3 million, with funding from Specialist Investment of GBP521,000 and the balance coming from the loan facility provided by Heritage Square Ltd.
The gross initial rent per annum will be GBP115,000.
In a separate deal unveiled later Thursday, Specialist Investment said it has agreed to buy 16 flats that are currently being constructed in Workington, Cumbria.
The property in question is being developed by converting and extending a former hotel and construction is currently underway and is expected to be completed by the end of 2016.
Completion of the acquisition will not take place until all construction has been completed as attested by an independent monitoring surveyor. The property is being purchased from The Viaduct Hotel Ltd.
An agreement has been entered into to lease the property on a 25-year inflation linked, full repair and insuring lease to, once again, Inclusion Housing Community Interest Co, with initial rent of GBP178,000 per year.
The consideration for the acquisition will be approximately GBP2.3 million and the company has "two alternative proposals for funding this", it said.
Back in August, Specialist Investment said it is reviewing its options for raising further equity finance.
"If this is done before the construction of the Property is complete, Specialist Investment expects to fund approximately GBP910,000 from cash resources with the balance coming from funds drawn under the company's existing loan facility agreement with Heritage Square," said the business.
"In the event that the company does not proceed with an equity fundraising, Specialist Investment would fund approximately GBP410,000 from cash resources, with the balance coming from funds drawn down under the new framework agreement," it added.
The two acquisitions represent the third and fourth to be made by the company in the supported-living sector and the eighth and ninth acquisition overall since it began implementing its new investment policy in March.
Specialist Investment shares closed up 6.0% to 21.20 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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