Grainger and Frogmore to put retirement homes businesses on market
Retirement home businesses worth more than £100m are to be put up for sale to capitalise on increasing interest in the sector. Listed residential landlord Grainger has appointed Deloitte to review the Capital Appreciation Trust.
It bought the retirement home owner and operator in December 2006 for £71m, and could put it on the market for the same price. Fund manager Frogmore Real Estate Partners has appointed CB Richard Ellis to sell Britannia Parks, which owns mobile home retirement parks, for around £35m.
An ageing population will ensure there is high demand and strong income from a wealthy target audience, so well-financed retirement home operators remain attractive to institutional investors and private equity firms.
Grainger bought the Capital Appreciation Trust in late 2006 through a £71m offer for units in the Isle-of-Man domiciled open-ended investment company. The 912 properties are subject to lifetime leases or are vacant. Most are one-bedroom flats in McCarthy Stone developments, and more than half are in the south-east of England.
Deloitte’s corporate finance arm is undertaking a review of the firm, which owns and manages the flats. Grainger is understood to be considering a sale because the business is no longer core to its strategy, despite it being the UK’s leader in equity release property.
A spokesman said: “A key element of Grainger’s regular management processes is to assess all parts of our business and portfolios.” Frogmore, meanwhile, is understood to want to cash in on its investment in Britannia Parks, which it bought for its second property fund at the bottom of the market in March 2009.
The portfolio has been assembled over the last three years to target the over-fifties, and comprises 1,430 mobile home pitches with 1,225 income-producing homes. It stretches across the south of England and covers Littlehampton, Bognor Regis and Tunbridge Wells.
Frogmore declined to comment. n Deloitte has been appointed administrator to two retirement villages in the south-west that struggled because of falling income. Crystal Fountain Retirement Village in Gloucestershire and Woodlands Court Retirement Village in Bristol were operated by the Care Village Group.