Octopus Real Estate enters specialist care with £100m deal

Real estate lender and investor Octopus Real Estate has acquired six assets from Patron Capital-backed care home developer and operator Hamberley Group for £100 million.

The deal follows Hamberley’s £100m sale and leaseback deal with Rynda Healthcare in late April.

The new 35-year deal will see Octopus enter the specialist care market for the first time. The homes, part of a sale and leaseback deal, are for residents with complex care requirements, including those with acquired brain injuries.

It includes the purchase of the Inspire Neurocare neurological rehabilitation centre in Worcester. The centre provides rehabilitation, long-term and respite care for people living with brain and spinal cord injuries and progressive neurological conditions such as Huntington’s disease, multiple sclerosis and motor neurone disease.

The transaction will account for a total of 334 beds across Inspire Neurocare and Hamberley Care Homes. It will also fund the construction of three new Inspire Neurocare sites in Southampton, Camberley and Basingstoke, adding much needed capacity to the UK’s complex care market.

Follwing the acquisition, Octopus will take ownership of Hamberley Care Homes’ first home, Caddington Grove, in Bedfordshire, and a new luxury care home to be built in Southampton, alongside the upcoming Inspire Neurocare service.

Mike Toft, head of care homes at Octopus Real Estate, said: “Entering this nascent investment sector within the healthcare real estate market was the natural next step for Octopus and our healthcare strategy. We understand the nuances of specialist care and are sensitive to resident needs and concerns. We also have an in-house clinical assurance team that collaborates with operators to ensure the provision of quality care.

“These assets in particular are the preeminent portfolio of purpose-built neuro rehabilitation facilities in the UK. With Hamberley, we know we have a fantastic opportunity to positively disrupt the specialist care market, and improve the lives of those with neurological conditions.”

Tim Street, director of the Hamberley Group, said: “This funding will ensure we can expand our operational businesses and continue to offer more of the highest quality care and support to people in the local communities which we are proud to serve.”

Keith Breslauer, managing director of Patron Capital, added: “This is the second major sale and leaseback transaction Hamberley have completed this month, underlining the strong investor confidence in the health and social care sectors. Having built and sold both Gracewell Healthcare and the neurological specialist provider, Badby Park Group, we have a strong track record in developing the very highest quality healthcare properties that support and transform the lives of individuals living with some of the most complex conditions.”

In addition to the six assets within the Octopus partnership, the group has a development pipeline of sites in Cambridge, Dorking, Hindhead, Bristol, Keynsham, Cofton Hackett and Edwalton.

The Hamberley Group has over £170m of equity capital allocated for healthcare investment. The Hamberley Group will have a total of 28 homes (1,939 beds) by 2024, the group said.

CBRE acted as advisor on the Patron/ Hamberley side, while legal advisors were Travers Smith (Corporate / Real Estate) and Freeths (Banking). Connell Consulting was commercial due diligence advisor for Hamberley (Inspire Neurocare).

Knight Frank advised Octopus. Trowers & Hamlins provided legal advise and Carterwood & BDO were commercial due diligence advisors

Date published: May 4, 2022

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