Impact Healthcare REIT’s adds 11 care homes so far in 2018 partly financed with £50m Metro Bank debt facility

By James Wallace - Thursday, August 09, 2018 10:04

Impact Healthcare REIT has acquired 11 care homes over the year to date, consisting of 585 beds, taking its portfolio to 68 homes.

In H1, Impact Healthcare REIT acquired six care homes, with 367 beds (a 14.5% increase on the beds as at 31 December 2017), taking our portfolio to 63 homes, adding two additional tenants.

In August, the REIT exchanged contracts to acquire a portfolio of five care homes comprising 218 beds for a total consideration of £12.15m. The homes will be managed by Careport Advisory Services, the Group’s fourth tenant group.

In addition, Impact Healthcare REIT has exchanged to buy a further home with 77 beds but not yet completed.

The acquisition spree has been debt financed by its maiden debt facility: a five-year £50m facility with Metro Bank at a rate of 2.65% above base rate, £30m of this was secured in June with a £25m term facility and a £5m RCF, with a further £20m RCF to follow.

Consistent with the group’s hedging policy, a cap was put in place at 1% on one-month LIBOR for the £25m term facility for the duration of the loan. The £25m term element was drawn at the half year, taking our gross LTV to 11.2%.

The remaining proceeds from the second equity raise secured in November 2017 of £32.6m have been fully invested or committed. Healthcare REIT said said it “continues to engage with a number of finance providers, to maximise our financing options”.

The REIT continued: “With the additional funding secured from our first debt facility raised in the period, we remain positive about our strong investment pipeline including a number of exciting opportunities which we continue to progress with our investment adviser.”

NAV increased 1.38p per share, or 1.4%, to 102.03p per share over H1. The overall portfolio inched up 2.56% on a like-for-like basis to £184.3m and generates £14.49m in contracted annual rent of, an increase of £2.63m or 22.1% in H1.

Profit before taxation in H1 was £8.48m, 4.41p per share, while the REIT declared a 3.0p dividend paid or for the period.

Rupert Barclay, non-executive Chairman said: “The fundamentals of our market are strong, with growing demand for beds and limited supply. Care is an essential service and the government is looking at measures to relieve the pressure on adult social care and hospitals. Residential care homes will be an important part of the solution over the coming years and we see good prospects for the group.”

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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