Target Healthc. Regulatory News (THRL)

Target Healthcare REIT Limited

RNS Announcement

18 September 2013

Acquisition of a Care Home from LNT Carehomes Limited

Target Healthcare REIT Limited ("the Company"), a specialist investor in UK care homes, announces that it has acquired the freehold of a new care home from LNT Carehomes Limited, for approximately £4.0 million including acquisition costs.

Located in Thirsk, North Yorkshire, the care home is a modern, purpose-built home completed in 2013. This acquisition is in accordance with the Company's investment policy and the consideration is in line with market value.

This high specification home has generously proportioned bedrooms each of which benefit from en-suite wet room facilities. The public spaces are thoughtfully laid out, designed to create areas where residents and visitors can naturally socialise and interact, and which enable staff to work efficiently and discreetly.

The care home is leased to existing operator Ideal Carehomes for a period of 35 years 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.

Ideal Carehomes has been operating in the care sector for a number of years and benefits from LNT Group's 25 year heritage in designing, developing and operating purpose-built residential care homes for older people. It offers the highest quality of personalised care delivered in contemporary and relaxed settings. Currently, Ideal Carehomes employs 1,800 staff across 36 residential care homes.

This represents the Company's eighth care home acquisition since it listed its shares on the London Stock Exchange's Main Market on 7 March 2013. The Company has now invested approximately £36.0 million of the £50.3 million raised from institutional investors, wealth managers and private investors, and has entered into advanced legal negotiations to acquire further properties. If completed, these opportunities would result in the Company having invested its remaining available cash reserves in line with the anticipated investment schedule.

Consequently, and as previously announced, the Company is in discussions with its advisers regarding a proposal to raise additional equity, at a price which would not be dilutive to existing shareholders, by means of a placing of new ordinary shares. The Company expects to publish a prospectus in relation to this fundraising shortly.

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

"We are delighted to have completed this acquisition, continuing our support of an existing tenant who demonstrates a strong care ethos. The acquisition of this modern, purpose-built care home is consistent with our investment strategy of only committing funds to acquire first class quality care homes run by operators who show a strong focus on the personal care of the customer."

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