Chawley Grove

Developer / Operating Partner

• Supporting a developer / operator whose principals are very well-regarded in the sector with both an excellent track record of successfully operating premium care homes and who have a strong reputation with the Care Quality Commission.
• Growing operator group providing the potential for follow-on investment.

Location

• Prominent location in a residential setting close to the affluent city of Oxford, underpinning the operator’s business plan which was predicated on a largely self-funded resident population.
• Undersupply of market standard care beds in the catchment area (i.e. those with bedrooms with en-suite wetrooms) and 30% growth expected in regional bed demand over the next ten years.
• No other new care home developments in planning.

Real Estate

• An exceptional and very well-appointed property, with 70 bedrooms laid across three floors all of which have access to outdoor space either by way of direct access to the landscaped gardens via patio doors, or through large terraces on the upper floors.
• A very generous average floor space per resident of over 50m² across the home combined with floor to ceiling windows throughout providing for a light and spacious environment.
• A range of communal areas across the home, including larger areas for residents to enjoy taking part in activities together, as well as more intimate seating areas for receiving visitors / enjoying some quiet time.
• Several feature / “destination” areas such the cinema room, resident bar, spa and wellbeing centre, the activity room and also the private dining room which residents can use free of charge for family functions such as birthdays / other celebrations.
• Not just a beautiful place for elderly residents to live with good amounts of useable living space, but also the design of the building lends itself well to being operationally effective.

Development / Investment Case

• Target provided 100% of the development funding which was attractive to the developer, however this was capped at a maximum commitment for Target ensuring downside protection in the unlikely event of cost overruns.
• The developer had assembled a highly-experienced team with a main contractor and professional team all of whom had a track record in developing purpose-built, premium care homes.
• From the operator’s perspective, the rent was set at a sustainable level that works in the context of the local market.
• The ungeared net initial yield generated from the operational home supported the group’s current dividend yield.