Octopus Healthcare, a specialist UK healthcare real estate investor, has raised £187 mln (€210 mln) into its UK care home fund on the back of growing demand from institutional investors for the asset class.
Launched in 2010, the fund invests in modern, purpose-built, elderly care homes in the UK. It converted to an open-ended structure in 2017.
'With the population of the over 85’s expected to grow by 64% to 2.6 million by 2031, the UK is facing a severe shortage of suitable housing for the elderly,' said Ben Penaliggon, director at Octopus Healthcare.
'There is demand for modern, high-quality care homes in the UK, yet supply is limited. There is a huge opportunity for institutional investors to invest in this growing market and provide the capital needed to create suitable accommodation for the ageing population, while benefiting from the long term, inflation-linked income that the sector offers.'
Octopus Healthcare has secured over £230 mln of transactions into the UK elderly care home sector over the last 12 months, through a combination of standing investments, forward fundings and forward commitment acquisitions. In addition to UK care homes, the Fund also has the ability to invest in specialist healthcare facilities.
'Institutional investors are increasingly looking for alternative asset classes to expand or diversify their portfolios. Healthcare real estate offers a compelling combination of attractive fundamentals driven by an ageing population and long-term income, together with the social benefit of providing first class and modern accommodation for elderly people needing care,' said Hiti Singh, head of institutional investment at Octopus.
Octopus Group currently manages more than £2.3 bn of institutional funds across the group.