Target Healthcare buys operating care home in Merseyside
Specialist care home investor Target Healthcare has completed the acquisition of a property in Formby, Merseyside for approximately £6.9m including transaction costs, it announced on Monday.
The London-listed firm said the home, which fully met its strict care home investment criteria and opened following development completion in late 2017, comprised 40 bedrooms with full ensuite wet room facilities.
It said the home was “well on the way” to mature trading, which would allow decent rent cover soon after completion.
It was situated in central Formby, and was said to be well-equipped with modern facilities typical of Target’s existing portfolio, including large light-filled lounges and dining rooms, and pleasant gardens with direct access from several ground floor rooms.
The investment was underpinned by supportive fundamentals, the board explained, with Formby - on the coast just north of Liverpool - described as an “affluent area” with a shortage of alternative care options.
Target said the home was let on a 35-year lease with an RPI-linked cap and collar to the Athena Healthcare group.
Athena had two other homes under lease, and two further under forward-fund agreements with Target Healthcare expected to complete later in 2019.
In total they had six operating homes and six others in development.
The yield on acquisition was consistent with the overall yield in the Target Healthcare portfolio and, as the home was already trading, there was no rent-free period.
“This represents another high standard addition to the portfolio, in an area with a shortage in provision of quality care homes,” said Target Fund Managers head of investment John Flannelly.
“It allows us to continue to support the development of homes by the Athena Healthcare team, who have demonstrated a commitment to providing the best standard of care, in line with our ethos.
“We currently have a number of other acquisitions in advanced due diligence, as well as a large pipeline of transactions in earlier stage assessment, and expect to make further announcements in the near future.”