Target Healthcare has acquired a portfolio of modern operational care homes in Scotland and contracted on a forward commitment to acquire a fourth home.
The total investment across the two transactions of £45m reflects a blended acquisition net initial yield in excess of 6%.
The three existing operational care homes, acquired via sale and leaseback from an experienced operator, feature 100% ensuite wet-room provision and have delivered consistently strong rent cover generation greater than 2x. The properties benefit from 35-year, full repairing and insuring occupational leases with RPI-linked caps and collars.
The development of the fourth property, which is pre-let to the same operator, is already well advanced and is expected to reach practical completion in summer 2026.
John Flannelly, head of investment at Target Fund Managers, said: “These acquisitions for £45m, which were part of the pipeline of assets referenced in the September disposal announcement, demonstrate our deal execution capabilities and the efficient redeployment of capital into high quality real estate at an attractive and accretive blended net initial yield.
“The strong level of profitability and rent cover generated from the three operational care homes underpins the security of long-term rental income, together with the addition of a fourth best-in-class care home during 2026. We are very pleased to be partnering with this highly experienced operator who evidences a strong regulatory track record as well as representing a new tenant to the group. We have a number of further transactions currently in due diligence and expect to be in a position to make further announcements regarding additional redeployment in due course.”
