Update on fund raise and two developments acquired

Target Healthcare REIT Limited and its subsidiaries

("Target Healthcare" or "the Group")

Update on fund raise and acquisition of two development sites in Cumnor Hill, Oxford and Badgers Mount, Sevenoaks

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 well-advanced developments in Cumnor Hill, Oxford and Badgers Mount, near Sevenoaks in Kent. The total value of the transaction is £37 million (including transaction costs and future development works), meaning that the Group's remaining uncommitted capital is fully deployed.

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 wetroom 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 24^th 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 premium, purpose-built properties to the portfolio, but also welcome a highly-regarded operator into our tenant group."

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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 58 assets with a total portfolio value of £403.7m (30 September 2018). In total these homes are let to 21 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.