Target Healthcare buys two more luxury care homes

Specialist care homes investor Target Healthcare has completed the acquisition of two “luxury” properties in Cirencester and Camberley, it announced on Friday, for a total consideration of £37m including acquisition costs.

The London-listed firm said both assets were let to subsidiaries of Aura Care Living, which was becoming its 21st tenant, providing further tenant diversification to Target.

It said the assets were let on 30-year, fully repairing and insuring occupational leases, with RPI-linked rent increases subject to cap and collar, and - in accordance with its investment strategy - providing “excellent quality” accommodation, 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 of this year, and comprises 73 bedrooms, all of which had full ensuite wet room facilities.

Kings Lodge in Camberley opened in July 2017, and comprises 64 bedrooms, also with ensuite bathrooms and wet room showers.

The company said both locations had been analysed through its specialist research capability, which showed them to have economic and demographic fundamentals that were “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 both homes.

As part of the transaction, Seamus Halton and Eamonn McGurk would join the board of the operator, which Target said would bring 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, would also continue in his role.

Target added that the yield was representative of assets of a similar standard and location within its portfolio.

“We are delighted to welcome our 21st tenant,” said John Flannelly, head of investment at Target Fund Managers.

“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.”

Flannelly said the homes were of “the very highest” specification, and provided an “excellent” standard of living for the residents, whilst providing a quality of care that was in keeping with Target’s 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.”