Target Healthcare REIT, a specialist investor in UK care homes, has acquired three purpose-built care homes and four specialist care bungalows for £20.4m. The facilities are located in Norfolk and Northern Ireland and are leased to Priory Group (the UK’s largest provider of mental health and elderly care services) for a period of up to 28 years. The transaction provides an initial yield in excess of 7% and the rents are subject to fixed annual uplifts.
With the completion of the transaction, THRL has invested over £110m (since listing in March 2013), which has been funded from both the IPO proceeds and bank debt. THRL has advised that it has a pipeline with c £30m of potential transactions that are at an advanced, although non-binding, stage of negotiation and is in discussion with its advisers regarding proposals to raise additional equity.