Acquisition of care home in East Sussex

19 November 2018

Target Healthcare REIT Limited and its subsidiaries

("Target Healthcare" or "the Group")

 Acquisition of care home in East Sussex, for £13.8 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 a modern, purpose built care home in East Sussex for approximately £13.8 million including acquisition costs. The transaction follows the successful share placing completed earlier this month by the Group, which raised gross proceeds of £50 million for acquisitions.

The home, which opened in September 2017 and was a care home design finalist in 2018, comprises 62 bedrooms with full en-suite wetroom facilities.  The home is designed around a residents' courtyard which has external seating for the residents and is an attractive feature of the home. The courtyard is complemented by a small garden to the rear of the building and a balcony on the first floor. Internally, the home benefits from all the facilities that would be expected from a luxury care home including a number of lounges, dining rooms, activities rooms as well as a cinema and a hair salon.

The home is let on a 35-year lease with RPI-linked cap and collar to a subsidiary of Caring Homes Group, the UK-wide care home operator which is an existing tenant within the Group's portfolio.  The yield is representative of assets of a similar standard and location within the Group's portfolio. As is customary for new and nearly new care homes, a short rent free period has been agreed which will assist the tenant's cashflows during the early trading period.

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

"The completion of this acquisition adds another high quality asset to the portfolio, further strengthening our relationship with Caring Homes and increasing our presence in the demographically strong South East market.

"We have now completed the £51 million of 'imminent' acquisitions we were targeting by the end of November. We continue to progress due diligence on the near term pipeline of approximately £28 million as well as advance multiple other investment opportunities that we are currently seeing in the market."

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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 plus two further assets acquired in November 2018. In total these homes are let to 22 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.