Target Healthc. Regulatory News (THRL)

Target Healthcare REIT Limited

RNS Announcement

1 July 2014

Acquisition of Turnkey Care Home in Leicestershire

Target Healthcare REIT Limited ("the Company"), a specialist investor in UK care homes, announces that it has exchanged contracts to acquire a new purpose-built care home in Hinckley, Leicestershire. The home will be acquired for approximately £6.0 million including acquisition costs in July 2014, when it is due to be completed and opened. This transaction is in accordance with the Company's investment policy.

The property is a modern, purpose built care home built to a very high specification, with 72 generously proportioned bedrooms. Each bedroom has full en-suite facilities, including wetroom showers, and the home benefits from several large public spaces. 

The care home will be leased to Care Concern Group 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. 

Headquartered in Slough, Care Concern Group currently operates 20 care homes across the UK. This is the second home which Care Concern operates in the Company's portfolio, along with Mossvale Care Home in Glasgow.

The Company has now invested or committed all of the £95.7 million raised from institutional investors, wealth managers and private investors. The Company has also started to draw down the £30 million committed term loan and revolving credit facility provided by the Royal Bank of Scotland plc.

As announced in the Circular of 18 June 2014 the Company is discussing with its advisers a proposal to raise additional equity.

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

"This transaction allows us to bring a high quality purpose built asset into the Company's portfolio and continue our support for a tenant that puts a strong emphasis on quality of care. We have strong pipeline of deals across a range of locations with regional and national operators, and with approximately £44 million of deals in advanced, non-binding legal negotiations we expect to announce further acquisitions soon."

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