Target takes aim at £100m equity raise for acquisition spree
Target Healthcare REIT has launched an £100m equity raise to part-fund an acquisition spree, including 18 operational care homes worth a combined £230m.
The listed specialist investor in purpose-built care homes will issue shares at 115 pence per new ordinary share to raise the £100m.
Target has entered into an agreement to acquire the 18 care homes that generate an annual contracted rent of £9.1m and has collected 100 per cent of rent due throughout the pandemic.
A further six assets are the final stages of due diligence consisting of three operational modern care homes and three forward-fund, pre-let development projects.
Target is also in advanced negotiations in relation to raising a further £100m of long-term debt that will be used to part-fund the pipeline assets from one of the group's existing lenders.
"Against by far the most challenging backdrop in the company's history, our modern, purpose-built care home portfolio has been a consistent and robust performer, with rent collection of 95 per cent. for the three most recent quarters, continued valuation uplifts and improving occupancy levels,” said Target chairman Malcolm Naish.
"At a time of increasing investor appetite for the stable, uncorrelated returns that our portfolio has consistently delivered, we believe these transactions will be transformational both in terms of scaling the company and providing greater diversification by tenant and geography, as well as our mission to take a leading role in supporting and improving the UK care sector," he added.