Target Healthc. Regulatory News (THRL)

Target Healthcare REIT Limited

RNS Announcement

18 June 2014

Acquisition of Two Modern, Purpose-Built Care Homes in the Midlands

Target Healthcare REIT Limited ("the Company"), a specialist investor in UK care homes, announces that it has acquired two purpose-built care homes - Bromford Lane and Beechdale Manor - in the Midlands, for approximately £14.3 million 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. The acquisition is in accordance with the Company's investment policy and the consideration is in line with market value.

The homes offer residential, nursing and dementia care as well as specialist high dependency care at Bromford Lane. The design of both homes is of high quality and the rooms in each home are generously proportioned and benefit from en-suite wet room facilities. Accommodating up to 181 residents across the two homes, both are over three floors and have welcoming public spaces and good access to outside space, including large balconies. 

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.

Bondcare was formed in 1996 and is a national care home operator. Bondcare represents the fifth tenant in the Company'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 the Company's investment portfolio increase to 18 care homes in total and the Company has now invested in excess of £91 million (including transaction costs) of the £95.7 million raised from institutional investors, wealth managers and private investors.

Kenneth MacKenzie, Managing Partner of Target Advisers LLP, commented on the acquisition:

"We are very pleased to have completed this acquisition, adding a further two modern, purpose-built care homes to the portfolio as well as broadening the Company's tenant base. We continue to grow the Company's investment pipeline with both 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."

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