Impact Healthcare REIT has raised £22.3m in a placing and offer for subscription. The group said the proceeds would be used with existing resources to acquire a pipeline of care home investments.

The group is in advanced negotiations to acquire six portfolios, consisting of 27 separate care homes, for a total of £169m. Existing resources include £70m of debt.

The company said the group and the UK care homes sector are supported by several structural benefits including:

  • long-term, inflation linked, lease structures with the company benefiting from a WAULT of over 19 years and 98% of its rent roll being linked to RPI (and the remaining 2% linked to CPI), subject to caps and collars;
  • a diverse portfolio of 134 different homes with an yield of 6.7%;
  • Affordable rents, demonstrated by the company’s rolling annual average rent cover of 1.9x – demonstrating strong rent protection;
  • 100% collection rate during the pandemic with no lease variations;
  • a disciplined approach to leverage with loan-to-value (LTV) of 19.4% at 31 March 2022, with a weighted average cost of debt of 3.1% and weighted average term to maturity of 6.1 years;
  • supportive demand fundamentals across the market including increasing requirements from a rapidly ageing population for high quality care and a need to reduce pressure on high-cost, medical care providers in the NHS; and
  • a sector that is largely uncorrelated with the wider economy.

A total of 19,032,420 new ordinary shares will be issued at a price of 117p, which is a premium of 1.8% to the company’s unaudited NAV of 114.93p as at 31 March 2022.

Rupert Barclay, chairman, said: “I would like to thank new and existing shareholders for their support in this fundraise, which will help to grow further our inflation linked, long leased REIT. Whilst equity capital market conditions remain challenging, the proceeds of this fundraise will allow the Company to progress its acquisition pipeline as well as allowing further scope to invest into additional accretive asset management initiatives, thereby modernising, extending and improving homes in the portfolio for the benefit of shareholders, tenants and their underlying residents.“

Immediately following admission, the company will have 404,764,328 ordinary shares in issue.