Target Healthcare REIT buys two more care homes
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Target Healthcare REIT, a specialist investor in UK care homes, has acquired two care homes – Bromford Lane and Beechdale Manor – in the Midlands, for about £14.3m including acquisition costs.
Located in Washwood Heath, Birmingham and Bilborough, Nottingham, both properties are modern, purpose-built homes and were acquired under a sale and leaseback arrangement from Bondcare, who will continue to operate them.
Accommodating up to 181 residents across the two homes, both are over three floors and offer residential, nursing and dementia care as well as specialist high dependency care at Bromford Lane. The care homes will continue to be leased to the existing operator Bondcare for a period of approximately 21 years at Bromford Lane and 35 years at Beechdale Manor, and the transaction represents an initial yield in excess of 7% The rent payable under the lease is subject to an annual uplift in line with the retail prices index subject to a cap and collar.
Formed in 1996 Bondcare is a national care home operator and is the fifth tenant in Target Healthcare REIT’s portfolio, in addition to the Balhousie Care Group, Ideal Care Homes, Orchard Care Homes and Care Concern Group. The completion of this transaction sees Target’s investment portfolio increase to 18 care homes in total and the company has now invested more than £91m (including transaction costs) of the £95.7m raised from institutional investors, wealth managers and private investors.
Kenneth MacKenzie, managing partner of Target Advisers LLP, the company’s investment pipeline included single and multi-asset acquisitions across regional and national operators.
“With approximately £50 million of deals in advanced, non-binding legal negotiations we expect to announce further acquisitions in the near-term,” said Mr Mackenzie.