On behalf of AXA Real Estate, Knight Frank specialist property team have acquired freehold interest of Manor Lodge care home, Chelmsford, from Aprirose REI for £17.6 million at a yield of 4.75%.
The 112 room, 50,912 sq ft care home building is let to Care UK Community Partnerships Limited (guaranteed by Care UK Ltd) at £890,788 per annum on a term of 25 years.
Aprirose REI were unrepresented.
Shaun Roy, head of specialist property team, Knight Frank, commented; “This is a significant care home investment transaction demonstrating increased institutional appetite for the sector and a further compressing of yields.”
Manish Gudka, Chief Executive Officer, Aprirose REI, commented; “Given the asset was recently acquired, we had intended to follow our strategy of holding long term for a good quality income stream on a modern and fit-for-purpose property but given the significant short term market movement we have taken the opportunity to crystallise strong IRRs and reinvest in other areas.”
Knight Frank’s recent Specialist Property research report 2015 forecasted that the volume of specialist property investment will exceed £10 billion in 2015 and will account for 20% of the total commercial market by 2020. Care homes especially are set to be the best performing asset in the healthcare sector, with a new wave of domestic and international operators set to enter the market moving forward this year