BAE Systems Pension Funds has formed a long-term investment partnership with Paris-headquartered care services company Korian which will provide asset and property management services for a portfolio of 23 long-term care and healthcare assets including nursing homes, post-acute and mental healthcare clinics across France, Germany and Spain..
BAE Systems Pension Funds, advised by healthcare real estate investment manager Elevation, has invested around €100m into the portfolio, which includes one greenfield site and four assets being redeveloped.
The portfolio has a net equity value of around €200 million on a blended capitalisation rate of 4.9% and has a 38% LTV. Capital expenditure on the greenfield development and redevelopments during 2022 to 2024 will bring the overall gross value of the portfolio to around €320 million, Korian said.
The partnership has a similar structure to one set up by Korian in 2020 with BNP Cardiff and EDF Invest. It has a term of 15 years with a possible extension and a minimum lock up of seven years for BAE Systems Pension Funds.
Korian expects remuneration at around 4.5% per annum, with a floor and a cap on the exit yield. This allows Korian to benefit from significant increase of the long-term value of the property above the cap.