Property Week - July 13, 2007
Institutional funds and overseas investors are thought to be in the running for the portfolio of 23 care homes. Invista Real Estate, ING, Prupim and the Quercus healthcare fund managed by Quintain on behalf of Morley are all understood to have expressed interested.
Mark Shipman, founding partner of selling agent Michael Elliott, confirmed that there had been interest from institutions and overseas investors. The £260m price tag would reflect a yield of 4.57% that would rise to 6.52% in March 2022 after deducting 2% buyer’s costs. However, the £230m is thought to be a more realistic price, at a yield of more than 5%. The portfolio is expected to generate annual rent of more than £12.1m. There will be annual rent rises of 3% a year from March 2011 to March 2022. Of the 23 care homes, 16 are within the M25 and the others are in Leeds, Sheffield, Nottingham, Luton, Reading and Slough.
Southern Cross is also selling 24 of its own properties on a sale-and-leaseback basis for £130m. The company would continue to operate the care homes and keep 40% of the operating profits from them. The other 60% would go to the property owner. Philip Scott, chief executive of Southern Cross Healthcare, said the firm has been talking to potential buyers but had not yet entered into detailed discussions. "We’re not in exclusivity with any one party at the moment," he said.
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Sunday, July 15, 2007
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