LONDON (ShareCast) - (ShareCast News) - Impact Healthcare has acquired, in a sale and leaseback transaction, a care home in Bristol for a total consideration of £4.9m, it announced on Monday.
The London-listed specialist fund said the home operated as two units on one site - Fairview Court and Fairview House.

It was being sold by the current owners as part of their retirement from the business.

On completion, the home would be operated by Welford Healthcare, which is owned and managed by Peter Madden, who Impact's board described as a "high quality operator" with an established track record of successfully managing and adding value to care homes.

The group would enter into a new full repairing and insuring lease with Welford for an initial term of 25 years, with an option for Welford to extend to 35 years.

Welford committed to a minimum annual expenditure on maintenance.

The initial rent of £0.36m receivable under the lease would be subject to annual, upward only rent reviews, increasing in line with the retail price index, with a floor of 2% per annum and a cap of 4%.

Fairview Court was built by the vendors in 2006 with 49 single bedrooms - all en-suite - providing nursing with dementia care.

Fairview House is a 22-bed unit in a period building, providing residential care.

Both units were rated 'good' by the Care Quality Commission, and were operating at or near full capacity.

The Impact board said it believed that the benefits making the care home an attractive addition to its portfolio included the level of initial rent agreed with Welford, which offered the company an attractive net initial yield, combined with a high level of rent cover to ensure the rent is sustainable.

Impact also saw a "clear path" to increase rent through a programme of active asset management.

"Planning permission is in place to extend Fairview House and to link the two units," the Impact board explained.

"Once this work is completed, it will be possible to operate the home as one unit, offering 79 bedrooms, all en-suite and refurbished to a high standard."

Impact also cited the addition of a "dynamic new tenant" as a benefit, with whom the company intended to do further business.

"The home is one of the target acquisitions identified by the group at the time of the fundraise completed in November 2017, and is in line with the group's strict investment criteria and returns profile," Impact's board added.

"The group has also agreed exclusivity on a number of further acquisitions, and continues to evaluate a strong attractive pipeline of potential investment opportunities."

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