Bridges fund sells two care homes to Octopus Healthcare for £20.5m

  • The two sites are in Stoke Mandeville in Buckinghamshire and Diss in Norfolk
  • Both are already let or pre-let to charitable operators providing high standards of care
  • These are the fourth and fifth exits from the CarePlaces Fund, a partnership between Bridges Ventures and Castleoak

The CarePlaces Fund, a specialist healthcare property fund managed by Bridges Ventures (“Bridges”), the specialist sustainable and impact investor, and Castleoak, a property developer that focuses exclusively on care and retirement housing, has agreed to sell two care homes to Octopus Healthcare (formerly MedicX) for £20.5m. The sale price reflects a net initial yield of 5.4%.

The two care homes are located in Stoke Mandeville in Buckinghamshire and Diss in Norfolk. Both will be operated by not-for-profit organisations providing high standards of care. The Stoke Mandeville site is already let to Freemantle Trust, while the Diss site is pre-let to Greensleeves Homes Trust. The sale of the Stoke Mandeville site has already been completed. The Diss site has been pre-sold, and is due to complete in July 2015 when construction work has finished and the tenant takes possession.

In 2010, Bridges identified healthcare – and care homes in particular – as an attractive property investment sector, in line with its strategy of focusing on investments that can make a positive societal impact alongside attractive commercial returns.

The ageing population and lack of public sector funding for the elderly, particularly those with specialist care needs, was creating a shortfall in the supply of high-quality accommodation. At the same time, private sector operators were seeking new, purpose-built facilities primarily for private-pay residents.

To address this pressing social challenge, Bridges teamed up with Castleoak, a developer with over 20 years of expertise in the sector, to create CarePlaces. This £100 million portfolio of care homes provides a better standard of care housing for elderly, often high-acuity, patients – and thanks to the incorporation of various sustainability features, also includes some of the most environmentally-friendly homes in the UK.

This sale represents the fourth and fifth realisations from CarePlaces, following the earlier sale of three care homes to Legal & General in November 2014 for c. £25m, a yield of 5.5%.

Knight Frank advised CarePlaces on this transaction.

Simon Ringer, Head of Property Funds at Bridges Ventures, said:
“CarePlaces typifies our strategy of investing in sectors and locations where changing demographics and consumer needs are increasing demand for property, and where we foresee growing institutional appetite for investment products. We are pleased to be able to crystallise more strong returns for our investors, and look forward to delivering more value from the portfolio in the coming months and years.”

Julian Evans, head of healthcare, Knight Frank, said:
“Octopus has acquired two outstanding future-proof care facilities constructed by Castleoak, which are let to excellent covenants”




Notes to editors

About CarePlaces

The CarePlaces Fund was launched in the summer of 2011 as a partnership between Bridges Ventures, a specialist sustainable and impact investor, and Castleoak, a specialist developer of care and retirement housing. Its objective is to deliver steady, sustainable long-term returns for investors by offering a first-class product and service to care providers, while also offering care operators an equity partner with a genuine interest in, and respect for, the work being done in looking after older people and those with specialist care needs.

About Bridges Ventures

Bridges Ventures LLP (“Bridges”) is a specialist fund manager focused exclusively on sustainable and impact investment. It invests in high-impact SMEs, properties and social organisations that can generate superior returns for both investors and society as a whole, focusing on four key impact ‘themes’: health & wellbeing, education, sustainable living and under-served markets. Its property funds typically invest in niche sectors, regeneration areas and buildings showing environmental leadership. Bridges now manages almost £500 million across its Sustainable Growth, Property and Social Sector funds.

About Castleoak

Castleoak is a specialist construction and development partner for care and retirement housing. Established as a family partnership in 1984, it has worked exclusively in the care sector since 1996. To date, it has built over 180 homes, delivering over 9000 care bed spaces, and more than 3000 extra care apartments. It has an unrivalled track record of delivery with many of the UK’s leading commercial and not-for-profit care operators, with customers including registered social landlords (who are often working in partnership with care providers), charities and independent companies.