LONDON (Alliance News) - AEW UK Long Lease REIT PLC on Thursday said it has acquired a long let Care Home in Nailsea, Bristol, for GBP6.7 million.
The purchase, reflecting a net initial yield of 5.8%, comprises a 62-room purpose built care home. The property is let to, and operated by, Handsale Ltd, a provider of elderly care services.
The real estate investment trust said the acquisition was funded through the GBP11 million extension of the company's existing debt facility with Canada Life Investments.
The trust agreed the increase to its loan facility with Canada Life at the end of last year, taking the total facility amount to GBP41 million. The weighted average interest cost of AEW UK Long Lease REIT's GBP41 million facility is 3.2% and is repayable in October 2025.
Looking forward, the company said its investment manager has identified a number of additional investment opportunities and has a further property under offer which, if completed, will be funded through the balance of the debt facility.
"This acquisition is a great addition to our portfolio, with its accretive day one yield, long term income stream and attractive rental uplift profile," said Portfolio Manager Alex Short.
"This debt facility extension and acquisition together both reflect our continued effort to improve dividend cover as well as boost the quality of the company's income stream through long leases and additional tenant diversification," added Short.
AEW UK Long Lease REIT shares were flat on Thursday at 89.20 pence each.