Acquisition of care home in East Sussex, for £13.8 million

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Target Healthcare (LSE: THRL), the UK’s listed specialist investor in modern, purpose-built care homes, announces that it has completed the acquisition of a modern, purpose built care home in East Sussex for approximately £13.8 million including acquisition costs. The transaction follows the successful share placing completed earlier this month by the Group, which raised gross proceeds of £50 million for acquisitions.

The home, which opened in September 2017 and was a care home design finalist in 2018, comprises 62 bedrooms with full en-suite wetroom facilities.  The home is designed around a residents’ courtyard which has external seating for the residents and is an attractive feature of the home. The courtyard is complemented by a small garden to the rear of the building and a balcony on the first floor. Internally, the home benefits from all the facilities that would be expected from a luxury care home including a number of lounges, dining rooms, activities rooms as well as a cinema and a hair salon.

The home is let on a 35-year lease with RPI-linked cap and collar to a subsidiary of Caring Homes Group, the UK-wide care home operator which is an existing tenant within the Group’s portfolio.  The yield is representative of assets of a similar standard and location within the Group’s portfolio. As is customary for new and nearly new care homes, a short rent free period has been agreed which will assist the tenant’s cashflows during the early trading period.

John Flannelly, Head of Investment at Target Fund Managers, commented:

“The completion of this acquisition adds another high quality asset to the portfolio, further strengthening our relationship with Caring Homes and increasing our presence in the demographically strong South East market.

“We have now completed the £51 million of ‘imminent’ acquisitions we were targeting by the end of November. We continue to progress due diligence on the near term pipeline of approximately £28 million as well as advance multiple other investment opportunities that we are currently seeing in the market.”

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