Brussels-listed healthcare property company Aedifica has made its first acquisition in Ireland, spending €25 million on a purpose-built care home in Mallow, County Cork.
The asset, which has capacity for 184 residents, produces a net initial yield of around 5.5%. It is operated by Virtue, which is part of the Emera Group.
Aedifica CEO Stefaan Gielens said that the deal adds a seventh country to its portfolio, increasing its diversification.
“Ireland provides an attractive investment opportunity for Aedifica, since the care market is still very fragmented and the rapidly ageing population will lead to increasing demand for healthcare real estate,” Gielens said.
He pointed out that it is customary in Ireland to let care homes on new irrevocable 25-year triple net leases that are fully indexed to the consumer price index (CPI). Ireland’s elderly care market is fragmented and the top ten operators represent just 25% of the market.
Private operators have about 82% of the market, the remainder accounted for by public care homes run by the Health Service Executive. Aedifica points out that the long-term growth potential of the care home segment in Ireland is under-pinned by increasing life expectancy while a significant element of the public care home stock is outdated and a significant proportion of total current built stock will have to be renovated or replaced in the coming years.