Nordic Aged Care Fund growth continues
As at 30 September 2017, the Northern Horizon Nordic Aged Care Fund has acquired or committed to acquire through forward purchase or forward funding contracts a total of 33 care homes in Sweden and in Finland, for a total acquisition cost of EUR151 million.
The Fund has signed 30 care home acquisitions in Finland so far. “Our pipeline in Finland remains very strong, and we continue to find projects satisfying our return targets“, explains Jussi Rouhento, Head of Finland at Northern Horizon.
In Sweden, the Fund has so far signed three care home acquisitions. The first asset, in the southern city of Kristianstad, was completed in September 2017 and has been handed over to Attendo, who operates the facility under a long-term lease agreement. The SEK150 million state-of-the-art care home features 54 units for senior citizens in need of 24/7 care. Two further care homes in the greater Stockholm area are currently under construction. “The growth and non-discretionary nature of the care demand, combined with a primarily public-pay model and the impressive fiscal strength of Sweden, gives protection from the risks we think are emerging in several other segments of the Swedish real estate investment market”, comments Christopher af Trampe, Head of Sweden at Northern Horizon.
“The demographically-driven demand for residential elderly care facilities across the Nordics continues to grow as predicted. The resolve of the Nordic societies to provide all the elderly with the care standards they deserve remains as strong as ever. And we like the predictability and length of the rental cash flow profile provided by our Nordic government-backed care system“, concludes Northern Horizon CEO Michael Schönach.
Northern Horizon has by the end of September 2017 obtained equity commitments of EUR189 million for the Fund. Based on the deal pipeline, the current equity commitments are likely to have been fully committed to specific care home projects in the next six months. Northern Horizon expects to reach the Fund’s final target equity base of EUR250 million in the coming months. The Fund’s investor base consists of seven institutional investors and family offices from the UK, Continental Europe and the Nordics.
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