Target Healthcare buys new-build Nottingham care home for £7.6m

Care homes investment company Target Healthcare has completed the acquisition of a property in Nottingham for approximately £7.6m, including transaction costs, through a sale-and-leaseback transaction, it announced on Friday.

The London-listed firm said Acorn House, built in 2013, comprised 64 bedrooms - each with full ensuite wetroom facilities - over three floors.

It said it was located in close proximity to the centre of Nottingham in a densely-populated area, where its research showed there was a “strong demand” for that type of modern home, of which there was reportedly low supply.

The investment fully met Target’s strict criteria, the board confirmed, including being recently purpose-built with modern facilities and a high quality of care provision, and was backed by a “strong” trading history with “consistently high” occupancy providing strong rent cover.

Target said the home had been operated since opening by Acacia Care - a local operator of three homes, one of which was already owned by the company.

Acacia had plans to grow further in the coming years, the board said.

The home had been leased back to them on a 35-year lease, with an RPI-linked cap and collar.

Target said the yield on acquisition was consistent with the overall yield in its portfolio and, as the home was already trading, there was no rent-free period.

“This acquisition brings the number of assets in our portfolio to 63 including developments, and offers us the opportunity to support the growth of a tenant we regard as an operator of quality,” said Target Fund Managers head of investment John Flannelly.

“The home has positive CQC ratings and provides a warm and welcoming environment for its residents.”

In addition to the Acorn House investment, Flannelly said Target had recently seen three forward-fund developments in its portfolio open to residents.

“The care home market is undersupplied with the quality of asset which we provide, while demand is growing apace, underpinning our conviction in the portfolio we are assembling.”