The UK’s listed specialist investor in modern, purpose-built care homes, Target Healthcare; has announced it has fully deployed its uncommitted capital in a transaction worth £37 million by completing the acquisition of two well-advanced developments in Cumnor Hill, Oxford and Badgers Mount, near Sevenoaks in Kent.
The remainder of the development works will be funded under capped development contracts to create two high-quality residential care homes with a combined total of 130 beds. The properties will be completed to a high standard, with the inclusion of full en-suite wet room facilities, large communal areas, extensive on-site facilities and offering a premium fit-out. The investment is underpinned by the strong wealth characteristics and positive underlying demographics of the local areas.
Both developments are due to complete by mid-2019 and the completed homes will be let on a full repairing and insuring basis to Hamberley Group (“Hamberley”), a developer and operator of luxury care homes, which is backed by Patron Capital, the pan-European institutional investor focused on property backed investments. The founders and principals of Hamberley have a strong track record in the UK healthcare sector having previously established Gracewell Healthcare and The Badby Group. Hamberley will represent the Group’s twenty-second tenant, providing further tenant diversification.
The 35-year occupational leases include annual, upwards-only RPI-linked increases, subject to a cap and collar. The yield is representative of assets of a similar standard and location within the Group’s portfolio and rental payments will commence on occupation by Hamberley of the completed buildings.
The transaction sees the Group commit to a significant amount of the £79 million of near-term investment pipeline identified in its announcement on 24th October 2018 as well as allowing it to fully deploy its remaining uncommitted capital. The Group has further near-term potential acquisitions currently in due diligence totalling approximately £42 million. In addition to this, there is a significant medium-term pipeline of potential opportunities totalling over £70 million across eight different assets that the Group is looking to progress to agreed heads of terms.
John Flannelly, Head of Investment at Target Fund Managers, commented on the acquisition:
“We are delighted to announce the completion of this transaction which enables us not only to add two premiums, purpose-built properties to the portfolio, but also welcome a highly-regarded operator into our tenant group.”