Target buys £6.9m care home

John Flannelly, head of investment, Target Fund Managers

Target Healthcare REIT has completed the purchase of a care home in Formby, Merseyside, for £6.9m.

The home, which comprises 40 bedrooms with en suite wetroom facilities, will be let on a 35-year lease with an RPI-linked cap and collar to Athena Healthcare Group. The property also has large light-filled lounges and dining rooms, and gardens.

Athena has two other homes under lease and two further under forward fund agreements with Target, which are expected to complete later this year. In total they have six operating homes in the North West and in Kent, and six others in development.

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

John Flannelly, Target Fund Managers head of investment, said: ‘This represents another high standard addition to the portfolio, in an area with a shortage in provision of quality care homes. It allows us to continue to support the development of homes by the Athena Healthcare team, who have demonstrated a commitment to providing the best standard of care, in line with our ethos.

‘We currently have a number of other acquisitions in advanced due diligence, as well as a large pipeline of transactions in earlier stage assessment, and expect to make further announcements in the near future.’

The group’s portfolio value stood at £463.9m at 31 December 2018.