Octopus Real Estate has completed a deal to acquire eight care homes from LNT Care Developments for more than £100m.
The lender and investor, which is part of Octopus Group, has committed to buy five of the care homes at practical completion and will forward fund construction of the remaining three over their 12-month build periods.
It is one of the biggest portfolio purchases to date for the Octopus Healthcare Fund.
The care homes are located in Wombourne, Nottingham, Wakefield, Cannock, Kidderminster, Swadlincote, Redditch and Salisbury.
Seven care homes will be let to Ideal Carehomes and one to Elmfield Care, each on a 35-year lease. Ideal Carehomes is an existing Octopus Real Estate tenant, while Elmfield is a new operator formed by LNT in partnership with Elmfield’s directors.
Octopus Real Estate’s portfolio comprises 65 purpose-built care homes in the UK.
Chris Wishart, director of origination at Octopus Real Estate, said: “The sector still requires significant further investment given the UK’s ageing population, and we continue in our work to bridge that gap.
“Extending our relationship with [LNT and Ideal Carehomes], in addition to Elmfield Care, is a key step in executing our strategy of funding modern care homes with robust fundamentals.”
Nick Kempster, a healthcare agency and development associate at Knight Frank, which advised LNT on the deal, said: “We are seeing an increased flight to quality from operators and investors within the elderly care sector, particularly as the pandemic has highlighted the undersupply of future-proofed assets and the need for further development within the sector.”
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