Aedifica lands major UK healthcare portfolio for €500m

Belgian REIT Aedifica has acquired a portfolio of 93 healthcare properties in the UK from US private equity firm Lone Star for around £450 mln (€498.2 mln).

The transaction was agreed with an affiliate of Lone Star Real Estate Fund IV and reflects an initial gross rental yield of around 7%. It marks Aedifica’s entry into the UK healthcare market, one of the biggest in Europe, and adds a fourth country to the company’s portfolio.

The portfolio is being acquired at a discount of roughly 5% to its fair value, Aedifica said. Closing of the transaction is expected at the end of January. The 93 - mainly purpose-built - care homes covered by the deal are spread over 91 locations across the UK, with the bulk (26%) in London and the Southeast.

JLL advised Aedifica on the transaction, which represents one of the largest healthcare deals of 2018 for the UK market, and the first ever by a European healthcare REIT.

Stefaan Gielens, CEO of Aedifica, commented: '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.' He added: 'The United Kingdom provides an attractive investment opportunity for Aedifica, since the healthcare market is still very fragmented and the ageing population is leading to increasing demand for care assets. Moreover, given current market conditions, Aedifica will acquire this portfolio at a discount as compared to the independently appraised fair value of the buildings.'

Aedifica will manage and expand the portfolio with the support of Layland Walker that has been providing portfolio management services for the past five years.

The portfolio’s tenant base consists of 14 well established UK care home operators, including Burlington Care, Maria Mallaband Care Group and Care UK.

The leases in the portfolio are inflation-linked, triple net leases with a weighted average remaining lease term of more than 22 years.

Euronext Brussels-listed Aedifica currently has a healthcare portfolio worth more than €1.8 bn in Belgium, Germany and the Netherlands.




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