Target Healthcare REIT, the specialist investor in UK care homes, has acquired three purpose-built care homes and four specialist care bungalows from Zest Investment Group for approximately £20.4 million including acquisition costs.
Located in Norfolk and Northern Ireland, each of the care homes offers a combination of residential, nursing and dementia care. One of the homes also provides specialist care for individuals with learning disabilities, autism and complex physical disabilities.
Accommodating up to 255 residents, the properties offer a range of facilities, including generously proportioned single bedrooms with en-suite wetrooms, spacious public areas and activity rooms, hair-dressing salons and therapy rooms.
The care homes will continue to be leased to the existing operator, Priory Group, for a period of up to 28 years. The transaction represents an initial yield in excess of 7 per cent and the rents payable under the leases are subject to fixed annual rental uplifts.
Target Healthcare REIT has now invested in excess of £110 million funded via a combination of equity and bank debt. The company is discussing with its advisers a proposal to raise additional equity.
Kenneth MacKenzie, managing partner of Target Advisers LLP, said: “Completing this acquisition not only adds a further three purpose-built elderly care homes and specialist care facilities to the portfolio, but also broadens the company's tenant base with the inclusion of a well-established, national operator.”