Legal & General makes first major care home and hospital investment
Legal & General has completed the acquisition of 13 care homes from Prestbury Investments, for a total consideration of just over GBP70m.
The homes are let to Methodist Homes (MHA), a care home provider.
Legal & General has lowered the current rents for 13 care homes by providing Methodist Homes with long term stable financing, with leases that have annual RPI-linked rent reviews, creating stability and certainty.
Legal & General has also invested GBP89m over a 32 year term, as part of a consortium to build the new Royal Liverpool University Hospital for GBP335m. Both investments are from the Legal & General annuity portfolio, matching long-term assets to liabilities, and will be used to pay customers' pension annuities.
Paul Stanworth, managing director for Legal & General Capital, says: "Legal & General is committed to investing in the fabric of the UK. There is a chronic shortage of housing in the UK, and we want to help to address this problem. This is our first investment into providing care homes for the elderly, we have already invested over GBP750m in student accommodation, have part acquired CALA Homes, and plan to move into homes to rent. A better infrastructure also includes better healthcare, and the new Royal Liverpool will help improve quality of life in the city and contribute to economic growth in the North West."
Legal & General wants to play a greater role in housing and infrastructure investment in the UK, and plans to provide long-term capital to the energy, education, transport, housing and health sectors.
Legal & General's investment programme for infrastructure is split broadly into two categories, each reflecting the different underlying policy or investor requirements, and the different types of investment capital available within the group.
Category ‘A’ Investments: CALA Homes, English Cities Fund, and strategic land bank developments – Crowthorne housing development. Here Legal & General builds and owns the asset, and takes on the construction, debt or equity risk. Many of these investments also help create category 'B' opportunities.
Category ‘B’ Investments: Imperial College and University of Southampton student accommodation, Hyde Housing Group, Methodist Homes, Royal Liverpool University Hospitals. Here Legal & General provides long-term investment capital for asset and liability matching, through secured lending and sale and leaseback arrangements.
Roger Davies, chief executive of Methodist Homes, says: “It is great to see Legal & General Property investing in our sector and in MHA particularly. We foresee a growing need of a range of accommodation, support and care services for Britain’s older people and are committed to playing a full part in meeting this need. LGP and MHA share a long term commitment and a strong values-base and we look forward to a long and successful relationship.”
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