Acquisition of homes in Cirencester and Camberley

29 June 2018

Target Healthcare REIT Limited and its subsidiaries

("Target Healthcare" or "the Group")

 Acquisition of two high quality care homes in Cirencester and Camberley for £37 million

Target Healthcare (LSE: THRL), the UK's listed specialist investor in modern, purpose-built care homes, announces that it has completed the acquisition of two luxury properties in Cirencester and Camberley, for a total consideration of £37 million (including acquisition costs). 

Both assets are let to subsidiaries of Aura Care Living ("Aura") which becomes the Group's twenty-first tenant, hence providing further tenant diversification to the Group.  The assets are let on 30 year fully repairing and insuring occupational leases with RPI-linked rent increases subject to cap and collar, and, in accordance with the Group's highly disciplined investment strategy, provide excellent quality accommodation available to residents, with well-proportioned en suite bedrooms and large areas of communal space, as well as additional on-site facilities. 

The Cirencester care home, Stratton Court, opened in April 2018 and comprises 73 bedrooms, all of which have full, en suite wetroom facilities.  Kings Lodge in Camberley opened in July 2017 and comprises 64 bedrooms, also with en suite bathrooms and wetroom showers.    Both locations have been analysed through the Group's specialist research capability, which has shown them to have economic and demographic fundamentals that are highly supportive for the care homes in the long term.

Aura is majority owned by chief executive Linda Lloyd, who was responsible for the development of these unique homes.   As part of the transaction, Seamus Halton and Eamonn McGurk will join the board of the operator, bringing their long experience operating in the premium care home market and development sector to a company with strong growth potential.  Mike Adams, an existing director of Aura, will also continue in his role.  

The yield is representative of assets of a similar standard and location within the Group's portfolio.

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

"We are delighted to welcome our twenty-first tenant.  This transaction marks a further deployment of the equity we raised in February of this year, following the acquisition of assets in Shrewsbury and Preston in March.  The homes are of the very highest specification and provide an excellent standard of living for the residents, whilst providing a quality of care that is in keeping with our own ethos.

"We continue to have a strong pipeline of potential investments that we are currently working on and we hope to make additional announcements in the near future as we continue to prudently grow the portfolio and improve the quality, diversity and visibility of our rental income."

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Notes to editors:

UK listed Target Healthcare REIT Limited (THRL) is an externally managed Real Estate Investment Trust which aims to provide shareholders with an attractive level of income, together with the potential for capital and income growth, through the assembly and management of a portfolio of modern, purpose built care homes.

The Group's current portfolio comprises 53 assets with a total value of circa £341.4 million (31 March 2018), which are let to 20 tenants.  

The Group only invests in modern, purpose built homes that provide the best environments for residents and their care providers and ensure they are let at a sustainable rent. The Group aims to build collaborative, supportive relationships with each of its tenants as it believes working in this way helps raise standards of care and helps its tenants build sustainable businesses. In turn, that helps the Group deliver stable returns to its investors.