AEW UK Real Return Fund has increased its commitment to impact investing to meet the demand from the social sector, acquiring two care homes in Lancashire for a total of £11.5m. The deal is in partnership with Prime Life, who have taken 30-year leases on the two properties, and the homes will generate investment yields of at least 6.7%.
The acquisition demonstrates AEW’s defensive strategy of targeting assets in the less cyclical areas of the economy and in sectors driven more by demographics and social need. It further aligns the fund’s strategy, which targets a real total return of 4% pa and a 5% gross portfolio yield and inflation-linked income growth, with the liabilities of pension savers, particularly LGPS schemes.
Ian Mason, portfolio manager at AEW UK Real Return Fund, said: “The care home sector is driven by strong social and demographic needs and the UK is set for substantial growth in its elderly population over the next few decades. It has strong market fundamentals and should remain resilient to any Brexit risks/uncertainties but, more importantly, we are pleased that the RRF strategy allows us to support social care in the regions where demand is most acute.”