The Group has invested in two care homes which were owned and operated by Woodleigh Care whose owners are retiring from the care home business. Both homes will be operated by an existing Group tenant, Welford Healthcare, and are in Mansfield, Nottinghamshire, offering 107 high quality predominantly en-suite beds, located within established residential areas.
The homes each have a track record of delivering high quality care with CQC ratings of Good and Outstanding and Welford Healthcare will look to continue the strong operational performance under its stewardship. One home has an EPC rating of B and the other is rated C with a strategy in place for achieving an EPC rating of B.
The consideration is £11.1 million and has been made initially by way of a loan to Welford Healthcare, which will allow it to complete the acquisition of Woodleigh Care immediately. The structure creates several benefits for all stakeholders, including enabling Welford Healthcare to take immediate operational control of the homes, thereby avoiding a potentially lengthy transition period while regulatory approvals are sought to register the operation of the homes in new legal entities, as well as other financial and operational efficiencies.
Once the regulatory approvals are received, Impact then has the option to acquire the property assets from Welford Healthcare, which also has the option to sell the property assets to Impact. Impact will receive interest payments equal to 7.7% per annum for the duration of the loan and, if either option is exercised, new 30-year leases on Impact’s standard terms have been pre-agreed with Welford Healthcare. Initial rent under the new leases is set at £713,750, reflecting a gross initial yield of 6.4%. Based on the homes’ current trading performance, rent cover is expected to be greater than 2.0 times.
The loan structure used to make this investment contains additional protections for Impact’s shareholders, including security over the applicable property assets under option and a number of operational covenants from Welford Healthcare, whilst the options also allow Impact to fix the future price of the property assets and associated rents in advance.
This investment will take the Group’s relationship with Welford Healthcare to nine care homes across England, with 462 beds.
The Company’s investment manager, Impact Health Partners LLP (the “Investment Manager”) is in developed legal discussions on several projects 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
Tom Yeadon firstname.lastname@example.org
Neil Winward email@example.com
Francesco Namari firstname.lastname@example.org
Tel: +4420 7029 8000
Winterflood Securities Limited
Neil Langford email@example.com
Joe Winkley firstname.lastname@example.org
Tel: +4420 3100 0000
Maitland/AMO (Communications Adviser)
James Benjamin email@example.com
Alistair de Kare-silver
Tel: +44 7747 113 930
The Company’s LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at www.impactreit.uk.