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Octopus raises a further £133.5m and acquires seven more care homes

January 18, 2019

Octopus Healthcare, part of the Octopus Group and a major investor in healthcare facilities throughout the UK and Ireland, has raised a further £133.5m for its Octopus Healthcare Fund (the Fund) and, separately, has also agreed to acquire seven care homes. This latest fundraising, from new and existing institutional investors, takes the total equity raised for the Fund to £320m since its launch in August 2017.

Octopus has agreed to acquire a portfolio of six modern, purpose-built care homes let on long leases to Care UK, the UK’s largest independent provider of health and social care, for about £110m. The assets are located in Banbury, Cheltenham, Horsham, Norwich, Ware and Witney. This acquisition builds on Octopus Healthcare’s existing partnership with Care UK, which now comprises eight care homes across the UK. Care UK was represented by CBRE throughout the transaction. In addition, Octopus has agreed to forward fund the development of a new elderly care home in the Midlands to be leased to a national operator.

According to Octopus, all seven assets have been designed to provide best-in-class support and care for elderly people in locations where there is strong demand for beds. These acquisitions will take the Fund’s total portfolio to 26 care homes.

Octopus Healthcare director Ben Penaliggon said the significant raising of new capital and the acquisitions were a strong endorsement of both Octopus’s ability to source and acquire high quality UK care homes, of the appeal of this asset class to investors, and the highly supportive demographic trends that drive it.

“This marked the end of a successful year for the Fund, during which it has secured over £279m of transactions into the UK elderly care home sector and we look forward to continuing to build the Fund’s portfolio through a combination of standing investments, forward fundings and forward commitment acquisitions,” said Mr Penaliggon.

Hiti Singh, head of institutional investment at Octopus, said the strong fundamentals of healthcare infrastructure investment, including the sustainable, inflation-linked income, risk-adjusted returns and supportive demographics, continued to attract institutional investor demand.

“Forty-five per cent of investors in our recent Healthcare Infrastructure survey indicated that they lack the investor skills and resources to invest in this asset class,” said Ms Singh.

“This creates an opportunity for us to build on our long-standing track record in this area and unlock an opportunity for investors who have an appetite to increase their allocations in healthcare infrastructure.”

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