Legal & General Property (LGP), acting on behalf of its UK Property Fund, has acquired a portfolio of three care homes in the UK for £25.2 mln (€32 mln), reflecting a net initial yield of 5.5%.

Legal & General Property (LGP), acting on behalf of its UK Property Fund, has acquired a portfolio of three care homes in the UK for £25.2 mln (€32 mln), reflecting a net initial yield of 5.5%.

The assets were purchased from Careplaces Fund, the specialist healthcare property fund managed by Bridges Ventures in partnership with care home developer Castleoak.

Located in Stratford-upon-Avon, Kidderminster and Stansted, the recently developed properties are all let to national care home operator, Care UK, on 30-year leases, with annual RPI increases. In total the three homes provide 187 registered care beds.

The deal brings L&G’s investment into the care home sector to around £220 mln. Previous deals include the acquisition of 15 care homes let to Methodist Homes, the forward-funding and purchase of a portfolio of five care homes let to Care UK, as well as another existing Care UK-operated asset, and a £51 mln, 10-year debt facility to the LNT Group, the parent company of Ideal Carehomes.

Matt Jarvis, fund manager of the Legal & General UK Property Fund, said: 'Adding to our diverse income stream, the purchase represented a compelling opportunity to access a long-term, inflation-protected income from modern, well-configured assets that we see offering long term structural growth potential. Whilst care homes are still regarded as an alternative property sector by many, we recognise the long-term need for investment and service in this market and recognise Care UK as one of the more established and better quality operators.'