TIDMIHR
RNS Number : 0933M
Impact Healthcare REIT PLC
19 January 2021
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
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(other than professional investors in the Republic of Ireland or
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Africa.
19 January 2021
Impact Healthcare REIT plc
("Impact" or the "Company" or, together with its subsidiaries,
the "Group")
BUSINESS, RENT COLLECTION AND ACQUISITIONS UPDATE
The Board of Directors of Impact Healthcare REIT plc (ticker:
IHR), the real estate investment trust which gives investors
exposure to a diversified portfolio of UK healthcare real estate
assets, in particular care homes, is pleased to announce the
following:
-- An update on its business;
-- The receipt of 100% of the contracted rent due; and
-- The acquisition of six care homes, three of which are managed
by a new tenant for the Group, Electus Healthcare.
BUSINESS UPDATE
As the current wave of COVID-19 has developed across the United
Kingdom, the Investment Manager has continued to be in regular
communication with all the Group's tenants and key service
providers to monitor how the pandemic is affecting them and also,
where appropriate, to share information amongst the tenants. The
health, welfare and safety of its tenants' care home residents,
healthcare professionals and wider stakeholders remains the Group's
top priority.
Tenants' occupancy levels were stable across the portfolio
during Q4 2020, but are below their usual levels. Managers at the
Group's homes report good levels of enquiries, however, new
admissions are not expected to rise substantially until current
lockdown restrictions on visitors to homes are eased and care home
vaccinations have been completed.
As at 15 January 2021, residents at 60% of the homes owned by
the Group had received the first dose of a COVID-19 vaccination,
with residents at a further 15% of the homes owned by the Group
scheduled to be vaccinated in the week beginning 18 January 2021.
It is anticipated that the remaining 25% of the Group's homes will
receive vaccinations before the Government's target of 31 January
2021 for completion of the rollout of the first dose of the vaccine
within UK care homes.
ROBUST RENT COLLECTION
The Group received 100% of its contracted rent for 2020 and
confirms receipt of 100% of the rent due on 1 January 2021 for
quarterly and monthly rent payments payable in advance.
ACQUISITIONS
In March 2020, as the first wave of the pandemic began, the
Group suspended new acquisition activity. From September, the
Investment Manager re-engaged, on a selective and disciplined
basis, with potential acquisitions which are in line with the
Group's investment criteria, and which have demonstrated a high
level of resilience during the first wave of the pandemic.
The Group has now completed the acquisition of three individual
homes to be managed by two of the Group's existing tenants, and a
portfolio of three homes to be managed by a new tenant for the
Group. Collectively these transactions will deploy GBP21.3 million
of initial capital, plus transaction costs, and a further GBP2.8
million of capital expenditure to enhance the properties, and to
extend one of them. The transactions are expected to deliver the
following benefits for the Group:
-- Add six care homes comprising 370 beds to the Group's
portfolio, which now totals 109 properties and 5,975 beds;
-- Increase the Group's contracted annual rent roll by GBP1.7 million, to GBP31.4 million;
-- While the Group's existing leases have significant ESG
provisions, these have been extended in the leases associated with
these acquisitions;
-- Add a new tenant, taking the Group's total number of tenants to 12(1); and
-- All of the acquisitions will be leased on Impact's standard
lease terms, with fixed terms of 25 years and annual upward-only
rent reviews linked to the Retail Prices Index ("RPI").
Electus Healthcare
The Group has completed the acquisition of three homes in
Northern Ireland, the first homes acquired by Impact in the
country, further enhancing the Group's geographic and tenant
diversification . All three homes were purpose-built in established
residential areas and provide a combined total of 193 beds. Two of
the homes are located to the south of Belfast and the third is in
the coastal town of Donaghadee.
The Group has paid a net purchase price of GBP7.7 million to the
vendors. As part of the transaction, and to support the new tenant,
residents and staff, Impact has committed GBP1.2 million of capital
expenditure, or just over GBP6,200 per bed. This significant
investment will be used to refurbish the homes and bring them up to
the high standards expected across Impact's portfolio. It will also
include works to improve the energy efficiency of the homes in line
with the Company's ESG policy.
The initial annual rent has been agreed at GBP693,000 and,
following the capital expenditure, will increase to GBP801,000.
Rent cover at acquisition was two times.
Electus has entered into new leases that have fixed 25-year
terms with no break clauses. The rents receivable under the leases
will be subject to annual upward-only rent reviews linked to RPI,
with a floor of 2% p.a. and a cap of 4% per annum. The leases are
under a new framework agreement with Electus Healthcare, which is
consistent with the terms of the framework agreements with the
Group's existing tenants. Electus has committed to a minimum annual
expenditure on the maintenance of the homes, as the Group's
existing tenants are also committed to do.
Blackwell Vale
The Group has completed the acquisition of Blackwell Vale for a
net consideration of GBP1.05 million. The initial rent will be
GBP85,000.
Blackwell Vale is a modern, purpose-built home located a short
distance to the south of Carlisle city centre and provides 51
bedrooms. As with the homes acquired in Northern Ireland, the Group
has identified an opportunity to improve the home and its energy
performance significantly and is committing GBP1.0 million of
capital expenditure in return for an increase in rent to GBP167,000
from April 2022. In addition, the home offers the opportunity for
extension, which the Group will explore in partnership with the
tenant.
The Group has appointed its existing tenant, Careport, as the
new tenant of Blackwell Vale. Careport now operates nine homes for
Impact with a total of 472 beds and strong rent cover above two
times across this portfolio.
Careport already operates Kingston Court in Carlisle, therefore
the acquisition will enable Careport to cement its position as a
trusted provider of elderly care services to the residents of
Carlisle and surrounding areas .
Mavern House
The Group has completed the acquisition of Mavern House Nursing
Home for a net consideration of GBP5.1 million. The initial annual
rent will be GBP387,500.
Mavern House is an attractive period property, which has been
substantially extended and is now largely purpose-built, providing
47 beds. It is located within the village of Shaw, a short distance
from the market town of Melksham in Wiltshire.
The Group has appointed one of its existing tenants, Welford, as
the new tenant of Mavern House. Welford now operates seven homes
for Impact with a total of 340 beds and strong rent cover above two
times across this portfolio.
Over the next 18 months, the home is to be extended, adding a
net additional six beds at a cost of circa GBP600,000 in return for
an increase in annual rent to approximately GBP437,500 from July
2022.
The Group has also completed the acquisition of St Peters House,
a care home in Bury St Edmunds managed by Welford. Details of this
transaction were announced on 4 September 2020 following
exchange.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Impact Health Partners LLP via Maitland/AMO
Mahesh Patel
Andrew Cowley
Winterflood Securities Limited
Joe Winkley
Neil Langford 020 3100 0000
RBC Capital Markets
Rupert Walford
Matthew Coakes 020 7653 4000
Maitland/AMO (Communications 07747 113 930
Adviser) impacthealth-maitland@maitland.co.uk
James Benjamin
The Company's LEI is 213800AX3FHPMJL4IJ53.
Further information on Impact Healthcare REIT is available at
www.impactreit.uk .
NOTES:
Impact Healthcare REIT plc is a real estate investment trust
("REIT") which aims to provide shareholders with an attractive
return, principally in the form of quarterly income distributions
and with the potential for capital and income growth, through
exposure to a diversified portfolio of UK healthcare real estate
opportunities, in particular care homes for the elderly. The
Group's investment policy is to acquire, renovate, extend and
redevelop high quality healthcare real estate assets in the UK and
lease those assets primarily to healthcare operators providing
residential healthcare services under full repairing and insuring
leases.
The Company's target total dividend for the year ended 31
December 2020 was 6.29 pence per share (2) , a 1.94% increase over
the 6.17 pence per share for the year ended 31 December 2019.
The Company has a progressive dividend policy with a target to
grow its annual aggregate dividend in line with the
inflation-linked rental uplifts received by the Group under the
terms of the rent review provisions contained in the Group's leases
in the prior financial year.
The Group's Ordinary Shares were admitted to trading on the main
market of the London Stock Exchange, premium segment, on 8 February
2019. The Company is a constituent of the FTSE EPRA/NAREIT
index.
(1) Minster, Croftwood, (both subsidiaries of Minster Care
Group), Careport, Prestige, Renaissance, Welford, Maria Mallaband
Countrywide Group, NHS Cumbria, Optima, Holmes Care, Silverline
Care and Electus Healthcare.
(2) This is a target only and not a profit forecast. There can
be no assurance that the target will be met and it should not be
taken as an indicator of the Company's expected or actual
results.
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