L&G's PAIF acquires three care homes for Â£25.2m from Bridges Ventures.
28 November 2014
Legal & General Property (LGP), on behalf of its Legal & General UK Property Fund, announces that it has successfully acquired a portfolio of three care homes from the Careplaces Fund, the specialist healthcare property fund managed by Bridges Ventures in partnership with care home developer Castleoak. Purchased for a total consideration of £25.2 million, the deal represents a net initial yield of 5.5%.
Located in Stratford-upon-Avon, Kidderminster and Stansted, the properties are all let to national care home operator, Care UK, on 30 year leases, with annual RPI increases. In total the three homes provide 187 registered care beds. Having only recently been developed, the properties are purpose built to the highest standards ensuring they match the requirements of the specialist operator and elderly residents that the homes cater for.
Continuing to participate in a growing range of housing and social infrastructure activities, the deal brings L&G’s investment into the care home sector to around £220 million. Previous deals include the acquisition of 15 care homes let to Methodist Homes, the forward funding and purchase of a portfolio of five care homes let to Care UK, as well as another existing Care UK-operated asset, and a £51 million, 10 year debt facility to the LNT Group, the parent company to Ideal Carehomes.
The sale represents the first realisations from Careplaces, which was established in 2011 to focus specifically on building a portfolio of pre-let care home investments. In line with its strategy of focussing on investments that make a positive social impact, whilst striving to generate good commercial returns, Bridges Ventures identified healthcare as an attractive property investment sector in 2010, owing to its ‘needs-driven’ characteristics created by an aging population and a lack of public sector funding to provide modern facilities for the elderly and those with specialist care needs. This shortfall in supply and quality of accommodation was matched by demand from private sector operators who were seeking new, purpose-built facilities primarily for private-pay residents.
Simon Ringer, Head of Property Funds at Bridges Ventures, commented: “This investment typifies Bridges’ strategy of investing at an early stage in sectors and locations where demographic changes and consumer needs are likely to increase the occupational demand for property, and where we foresee growing institutional appetite for investment products. The majority of UK care homes are owned by operators meaning the supply of assets for sale to investors is very low. By teaming up with Castleoak, which has 20 years of development expertise in the sector, we have successfully created a £100 million portfolio of high quality care homes with pre-lets in place. With more institutions recognising the merits of investing in this sector, we are pleased to be able to crystallise these early returns for our investors.”
Matt Jarvis, Fund Manager to the Legal & General UK Property Fund at Legal & General, added: “Adding to our diverse income stream, the purchase represented a compelling opportunity to access a long term, inflation-protected income from modern, well configured assets that we see offering long term structural growth potential. Whilst care homes are still regarded as an alternative property sector by many, we recognise the long term need for investment and service in this market and recognise Care UK as one of the more established and better quality operators.
“The transaction continues our strong acquisition drive over what has been another year of rapid growth, where the popularity of the Fund has resulted in net inflows of £463m equal to 64% growth in AUM in the 10 months to end of October.”
One of the fastest growing funds in its sector, launched in 2006 Legal & General’s £1.7 billion UK Property Fund has grown from £100 million since as it continues to see steady inflow of capital from both Retail and Institutional investors. The latest in a stream of acquisitions secured by the Fund, the portfolio deal follows last week’s successful purchases of 55 Strand, London WC2 for £37.4 million, 5 Vanwall Business Park in Maidenhead for a total consideration of £23.26 million. Converting into a Property Authorised Investment Fund (PAIF) structure in May this year, resulting in more tax-efficient income for many investors, the Fund delivers strong returns and has outperformed the Lipper Property IMA Sector peers over one, three, and five years.
Notes to editorsBridges Ventures
Bridges Ventures (www.bridgesventures.com)
Bridges Ventures LLP (“Bridges Ventures”) is a specialist fund manager dedicated to using an impact-driven investment approach to create superior returns for both investors and society at large.
Bridges Ventures manages almost £500m across three types of funds: Sustainable Growth Funds, Property Funds and Social Sector Funds.
Bridges Ventures Tel: +44 (0) 20 7262 5566
FTI Consulting Tel: +44 (0) 20 3727 1000
Dido Laurimore / Ellie Sweeney
Legal & General Property
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £476.8bn in assets on behalf of over 3,100 clients (30 June 2014) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 17 separate funds or vehicles including three segregated mandates with an aggregate asset value of £14.5bn as at 30 October 2014. These funds include:
Life Fund; Linked Pensions; Linked Life; Managed Fund; Legal & General UK Property Fund; UK Property Income Fund I; UK Property Income Fund II; LPI Income Property Fund and the Hybrid Property Fund
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance. Owing to its size, diversity and penetration, it benefits from best-in-class banking and property contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities.
Taking a client-centric approach, the business places the highest priority upon integrity and transparency, leveraging the significant resources provided by the wider LGIM platform. Protecting the medium to long term value of its portfolio, as a leader in sustainability, green principles are embedded into every property and investment decision.
Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability. In particular, the Company has a major development platform, responsible for delivering community-focused projects ranging from West End landmark buildings to significant town-centre retail and leisure regeneration schemes.
Forming part of the Group’s larger UK housing and infrastructure investment strategy, LGP also