Aedifica closes €514m portfolio deal in UK

Belgian REIT Aedifica has finalised its acquisition of a portfolio of 92 care home properties in the UK for £450 mln (€514 mln), announced before year-end 2018.

The initial gross rental yield for the deal, Aedifica's largest to date and its first in the UK, is around 7%. The portfolio comprises more than 5,700 beds across 92 properties in 90 locations, leased to 14 different operators on inflation-linked triple net leases. The weighted average unexpired lease term is more than 22 years.

'Conditions have been fulfilled for Aedifica's largest acquisition to date,' said Stefaan Gielens, Aedifica's CEO. 'By entering the UK market, Aedifica adds a fourth country to its portfolio and anchors its strategy as a pure play investor in European healthcare real estate. The UK provides an attractive investment opportunity for Aedifica, since the healthcare market is still very fragmented and the ageing population leads to increasing demand for care assets.'

According to Aedifica, the portfolio offers good geographical diversification with locations throughout the UK, and the largely purpose-built care homes offer a 100% single bedroom ration and above market average care quality ratings. The portfolio also offers the potential for further improvement through ongoing and identified extension and upgrade plans.

'Given current market conditions, Aedifica has acquired the portfolio at a discount as compared to the independently appraised fair value of the buildings. This transaction, in combination with our pre-let development pipeline, further establishes Aedifica as the market reference in listed European healthcare real estate.'

Aedifica said it would manage and expand its UK portfolio with the support of Layland Walker, a specialised operator which has been providing portfolio management services for the portfolio over the past five years. Layland Walker will work exclusively with Aedifica.

The transaction is being financed through existing and new debt facilities, and increases Aedifica's debt-to-asset ratio by around 10%.

PropertyEU's February issue carries an interview with Aedifica's CEO Stefaan Gielens about the deal



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