£260m tag on care homes

Jul 25 2007

by Graeme King, The Journal

AN estate of care homes run by North-East operator Southern Cross has been put on the market with a price tag of £260m. Owner Lifestyle Care is selling the 23 homes in and around London, but they will continue to be operated by Darlington-based FTSE 250 firm Southern Cross. The day-to-day operation of the properties was taken over by Southern Cross in February when it bought the operational business of the rival Lifestyle Care. Now the properties have been put on the market with agent Michael Elliott in London with some very large investors being talked of as potential suitors. The homes in and around London are let on long-term leases guaranteed by Southern Cross, with annual uplifts from 2011. The net initial yield is 4.57%. Story continues ADVERTISEMENT Richard Goldstein, a director at Michael Elliott, is marketing the homes and says investors are now anticipating more growth in the care home sector than in traditional property sectors. One London-based property agent said those interested in the Lifestyle Care estate could include such investors as Invista, Prupim, Morley and ING, which are all believed to be looking at alternative types of asset. Care homes are believed to be solid investments, partly because demand for beds is currently still strong, but also because if the market changes, homes tend to stand in residential areas, which offers an alternative use.

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