Case Study

Acquisition of two high quality care homes in Cirencester and Camberley

29 June 2018
Cost of acquisition for the two properties
£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).

"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."

John Flannelly
Head of Investment at Target Fund Managers

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.

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