Acquisition of care home in Merseyside

15 April 2019

Target Healthcare REIT Limited and its subsidiaries

("Target Healthcare" or "the Group")

 Acquisition of care home in Merseyside, for £6.9 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 property in Formby, Merseyside for approximately £6.9 million, including transaction costs.

The home, which fully meets the Group's strict care home investment criteria and opened following development completion in late 2017, comprises 40 bedrooms with full en suite wetroom facilities.  The home is well on the way to mature trading which will allow good rent cover soon after completion.  It is situated in central Formby and is well equipped with modern facilities typical of the Group's existing portfolio, including large light-filled lounges and dining rooms, and pleasant gardens with direct access from several ground floor rooms. 

The investment is underpinned by supportive fundamentals.  Formby, which sits on the coast just north of Liverpool, is an affluent area with a shortage of alternative care options.

The home is let on a 35 year lease with an RPI-linked cap and collar to Athena Healthcare group.  Athena has two other homes under lease and two further under forward fund agreements with Target Healthcare expected to complete later in 2019; in total they have six operating homes and six others in development.  The yield on acquisition is consistent with the overall yield in the THRL portfolio and, as the home is already trading, there is no rent-free period.

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

"This represents another high standard addition to the portfolio, in an area with a shortage in provision of quality care homes.  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."

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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 61 assets including seven under development with a total portfolio value of £463.9m (as at 31 December 2018).  On completion of the developments, the Group will have 25 different 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.