Impact Healthcare sells five non-core care homes

2nd Jul 2024 12:00

(Sharecast News) - Impact Healthcare announced the sale of five non-core care homes for £8.8m on Tuesday, in line with their latest valuation as of 31 March.

The London-listed real estate investment trust said the move was part of its active portfolio management strategy aimed at improving the sustainability and performance of its assets.

Three care homes in East Yorkshire - Ashgrove Care Home in Cleethorpes, Emmanuel House in Hessle, and Hamshaw Court in Hull - were sold for a combined total of £4.3m.

The buyer, a local care home owner and operator, would take over after the re-registration of operations from the current tenant, Minster Care Management, pending approval from the Care Quality Commission.

Impact said the transaction was expected to be completed in the third quarter.

Additionally, Impact completed the sale of two other care homes, Eryl Fryn Care Home in Llandudno, Wales, and Stansty House Care Home in Wrexham, for £4.5m.

They were sold to an affiliate of Minster, which is considered a related party under the listing rules.

An independent valuation confirmed the sale price for the homes, and the transaction fell under the smaller related party transaction category as per Listing Rule 11.1.10R.

The sold properties, part of Impact's IPO seed portfolio acquired in May 2017, were identified for disposal due to factors such as under-performance, low EPC scores, and smaller size compared to the portfolio average.

Impact said the disposals were expected to enhance the sustainability performance of Impact's portfolio by reducing exposure to properties with lower EPC ratings and higher carbon emissions.

Following the sales, Impact would own 135 properties and would have achieved an unlevered internal rate of return of 6.6% per annum on the non-core assets since purchase, with a broader portfolio IRR of 10.5% per annum from May 2017 to March 2024.

The transactions would also reduce the company's reliance on its largest tenant.

At 1143 BST, shares in Impact Healthcare REIT were down 0.23% at 85.2p.

Reporting by Josh White for Sharecast.com.