Impact Healthcare REIT Buys Six Cares Homes For £56M In Midlands And North West
Impact Healthcare REIT has invested in a portfolio of six care homes, which were owned and operated by Morris Care.
The purchase price of £56M will partly be paid in cash and partly through an issue of new shares in the company, the care homes specialist said in announcing its acquisition.
Morris Care has granted a licence for the homes to continue to trade under the Morris Care brand for three years and the operational management team of Morris Care will transfer to Welford Healthcare, which will operate the homes.
Welford is an existing tenant of the REIT and the investment will take Impact Healthcare’s relationship with Welford to 18 care homes across England with a total of 1,087 beds.
The newly acquired portfolio has 438 beds, of which 400 have en suite bathrooms, with five homes located in Shropshire and one in Cheshire. Four of the homes have EPC ratings of B, and two are rated C, with outline strategies in place for achieving an EPC rating of B, Impact Healthcare said.
In total, 80% of the £56M purchase price is payable in cash, with the balance paid in shares to the vendor, totalling 9,603,841 shares priced at 116.62 pence per share, which reflected the company's last reported net asset value at September 30, 2022.
All of the debt drawn down to fund the cash element has been hedged through a new £50M interest rate cap at a cost of £1.5M, which caps the Sterling Overnight Index Average at 3% for two years. The group has now hedged the interest rates on 80%, or £150M, of its current drawn debt of £187M with a gross loan-to-value ratio after this transaction of 28%. The group has a further £54M of undrawn debt facilities.
