Target Healthc. Regulatory News (THRL)

TARGET HEALTHCARE REIT LIMITED

RNS ANNOUNCEMENT

28 MARCH 2013

PORTFOLIO OF 4 HOMES ACQUIRED FROM IDEAL CAREHOMES GROUP

Target Healthcare REIT Limited ("Target Healthcare" or the "Company"), a specialist investor in UK care homes, is pleased to announce that it has acquired the freehold of four new care homes from Ideal Carehomes Group, which operates homes from the Midlands to the north of England and is part of the LNT Group.

For a total consideration of c.£18m, the Company has acquired four purpose-built care homes, all of which were completed within the last 12 months.The homes are in Castleford (64 bedrooms), Nottingham (64), Leicester (60) and Newark on Trent (54). The acquisition is in accordance with the Company's investment policy and the consideration is in line with market value.

All the homes are built to excellent specifications, each with generously proportioned bedrooms and public spaces. All bedrooms have their own en-suite 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 homes are leased to existing operator Ideal Carehomes Group for a period of 35 years and the transaction represents an initial rental yield in excess of 7%. The rent payable under these leases is subject to an annual uplift in line with the retail prices index subject to a cap and collar.

Ideal Carehomes has now 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 1,700 staff across 35 residential care homes, all of which have been opened in the last 3 years.

This is Target Healthcare's second care home portfolio acquisition since it listed its shares on the London Stock Exchange's Main Market on 7 March 2013. The first acquisition of three care homes was announced to shareholders on 11 March. The Company has now invested £32 million out of the £45.6m it raised recently from institutional investors, wealth managers and private investors, and intends to invest the rest of the funds by October this year. The Company expects to pay dividends on a quarterly basis, with an initial dividend of approximately 8p per share in respect of its first financial period to 30 June 2014 (which equates to a dividend yield of 6.0 per cent. per annum).

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

"This second acquisition is another excellent deal in terms of the caring ethos of the operator, the quality of the homes and the professional staff who provide such excellent care that focuses on residents' personal choices and independence. The deal, coming so swiftly after our first, also keeps us well on track to invest available funds by October. We continue to seek out investment opportunities in a growing market but we will be very strict about only committing funds to acquiring first class care homes run by those operators who show a strong focus on the care of the customer. Many of the Ideal staff are shareholders in the LNT Group, and we are very conscious that good quality care is delivered by the carers in these homes day by day. It is pleasing to see them sharing in the success of the Group."

Lawrence Tomlinson, Chairman of the LNT Group, added:

"At Ideal Carehomes we look to have around one third of our portfolio leasehold and two thirds freehold. Target has been an excellent partner to work with to help us achieve our care home roll out programme over the past three years. LNT Construction has built on average 1,000 new beds each year and Ideal Carehomes now operates 2,000 of these. We will look to do more with Target Healthcare in the future."

All enquiries:

Target Advisers LLP Tel: 01786 823 551

Kenneth MacKenzie

Gresham PR Ltd. Tel: 07866 805 108

Neil Boom

R&H Fund Services Limited Tel: 0131 625 2930

Martin Cassels