Target Healthcare has completed the acquisition of two properties, in Ripon, Yorkshire and Stourport, West Midlands, for approximately €20.5m (£18.6m), including transaction costs. Both investments fully meet the group’s strict criteria, being modern, well-equipped care homes with 100% en-suite wetrooms, underpinned by supportive fundamentals. The yield is representative of assets of a similar standard and location within the Group’s portfolio.
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The Moors Care Centre, in Ripon, was constructed in 2015 and comprises 70 bedrooms each with full en-suite wetroom facilities. The home is operationally mature and its current trading performance is delivering a strong rent cover in excess of 2.0x.
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The Wharf Care Centre, Stourport opened in 2018 and comprises 67 bedrooms with full en-suite wetroom facilities. The home is located in a predominantly residential area, close to the centre of Stourport. The Group’s demographic assessment of the local area is positive and the home is expected to perform strongly once it reaches operational maturity.
The homes are let on 35-year leases with RPI-linked cap and collar to a subsidiary of Maria Mallaband Care Group, the national care home operator. As is customary for new and nearly new care homes, a short rent-free period has been agreed in relation to the Wharf Care Centre which will assist the tenant’s cash flows during the early trading period.
John Flannelly, Head of Investment at Target Fund Managers, commented: “This transaction adds two further high-quality assets, in strong locations, to the portfolio and also allows us to welcome Maria Mallaband, a highly regarded national operator, to our tenant group. The group now has a highly diversified portfolio consisting of 63 assets (including developments), leased to 26 different operators. These acquisitions take us closer towards full deployment of our available capital and we continue to progress our identified pipeline of investment opportunities, with further announcements expected in the near future.”
