The board of directors of Impact Healthcare REIT plc (ticker: IHR), the real estate investment trust which gives investors exposure to a diversified portfolio of UK healthcare real estate assets, in particular care homes, is pleased to announce that the Group has recently exchanged contracts to acquire two care homes in Kent for £14.0 million plus acquisition costs. These acquisitions are with a new tenant, Belmont Healthcare (“Belmont“), the Group’s 14th tenant.
One home is a purpose-built, 120-bedroom property split over four units, each with 30 beds. It has strong operational cashflows and is located on a generous site, which has significant potential for future value-enhancing asset management and development opportunities. Following completion, we intend to invest further in the property to reconfigure the existing layout of each unit, reducing the number of bedrooms in each from 30 to 20. This will enable Belmont to deliver elements of an innovative ‘household’ model of care for residents with dementia, developed in the Netherlands, which has proven beneficial to residents. These works will be undertaken on a phased basis to enable occupancy to be maintained. There is further potential for complementary, healthcare-related development on the site, which we intend to pursue once the existing units have been reconfigured.
The second transaction is the sale and leaseback of a home currently owned and operated by Belmont. It has 48 bedrooms with en suite bathrooms. The home has been recently refurbished and extended. The acquisition of this home includes a potential deferred payment of up to £550k, subject to its continued strong trading performance. The deferred payment, if it becomes payable, will result in increased rental payments, ensuring that the effective purchase yield of this asset remains materially unchanged.
Both properties are well located and have an excellent reputation for quality care with ‘Good’ CQC inspection ratings.
Once completed, these transactions are expected to deliver the following benefits to the Group:
These acquisitions will be leased on Impact’s standard green leases, with fixed terms of 25 years and annual upward-only rent reviews linked to the Retail Price Index (“RPI”), with a floor of 2% p.a. and a cap of 4% p.a., with commitments to a minimum annual expenditure by the tenant on the maintenance of the care homes.
Completion is subject to re-registration with the Care Quality Commission.
The Company’s investment manager, Impact Health Partners LLP, is in developed legal discussions on several other acquisition opportunities and expects to make further announcements in the near future.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Impact Health Partners LLP via Maitland/AMO
Jefferies International Limited
Tel: +4420 7029 8000
Winterflood Securities Limited
Tel: +4420 3100 0000
Maitland/AMO (Communications Adviser)
James Benjamin firstname.lastname@example.org
Tel: +44 7747 113 930
The Company’s LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at www.impactreit.uk.