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Impact Healthcare REIT acquires St Peters House, Bury St Edmunds

IHR St Peters House

Impact Healthcare REIT (IHR) has announced that it has exchanged contracts on an individual property, St Peters House, in Bury St Edmunds, for a net consideration of £7.4 million. St Peters House is to be leased to an existing tenant. The initial rent will be £555,000, reflecting a yield of 7.5%. IHR has also completed the acquisition of the previously exchanged Holmes Care Portfolio.

About St Peters House

IHR describes St Peters House as an attractive period property which has been substantially extended and is now largely purpose-built, providing 62 single en-suite bedrooms. It is located in an affluent area close to the town centre of Bury St Edmunds and is currently rated as Outstanding by the care Quality Commission.

IHR has appointed one of its existing tenants, Welford Healthcare Limited (Welford), as the new tenant. IHR says that This will leave Welford operating six homes for IHR with a total of 305 beds and strong rent cover above 2 times across this portfolio. IHR says that it has put in place a new repairing and insuring lease with Welford for the home. The terms are the same as Impact’s standard lease terms, with a fixed term of 25 years and annual upward-only rent reviews linked to RPI. Welford has committed to a minimum annual expenditure on the maintenance of the home.

Completion of Holmes Care portfolio

On 9 March 2020, IHR announced the exchange of contracts on the nine Holmes Care homes, with completion subject to the required regulatory approvals from The Care Inspectorate in Scotland. IHR says that these approvals have now been received and the deal completed on 28 August 2020.

Both acquisitions financed from existing cash resources and debt

IHR says that both the St Peters House acquisition and the Holmes Care acquisition have been financed from its existing cash resources and available debt facilities. It says that it remains well capitalised, with a strong balance sheet and has significant liquidity and headroom. It has collected 100% of the rent due for the year to date.

Some potential acquisitions are at an advanced stage

IHR says that, when it paused on new acquisitions in March, it had a strong pipeline of potential investments and it is now re-engaging on certain acquisitions along with new opportunities, some of which are at an advanced stage. The Group expects to make further announcements in due course.

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