L&G buys Helical’s retirement portfolio

Legal & General (L&G) has paid £102m for Helical’s retirement villages portfolio, a discount of 13% against its book value of £117m.

The portfolio comprises four schemes located at Liphook in Hampshire, Faygate in West Sussex, Exeter in Devon and Great Alne in Warwickshire. The villages are at varying stages of development but on completion, the four schemes will deliver 694 units in total.

The villages will be integrated into L&G’s Inspired Villages Group, which it acquired in August. When combined, the deal brings Inspired Villages’ development portfolio to around 1,000 homes. 

As part of the transaction, Helical has transferred £46m of debt secured against the portfolio to L&G, and will receive 50% of the total net sale proceeds of £51m on completion, with the remainder deferred for 12 months.

Nigel Wilson, chief executive, added:  “This acquisition is another terrific example of Legal & General using its long term capital to address chronic market failures, by investing in a sector that delivers high social and economic impact to our society.  The UK is under increasing economic strain as populations expand and demand for housing increases.  Later Living offers industrial scale reductions in health and care costs to the elderly through prevention and avoidance; we see this housing sector as one of the most underserved in the UK and look forward to the Government engaging in positive public policy changes that help to support us in addressing this need.”

The disposal represents the largest element of Helical non-core disposal programme and will see a reduction in Helical’s overall level of group debt with the net cash proceeds received used to repay borrowings, and a reduction in loan to value of around 5%.

In the year to 31 March, the retirement village portfolio generated pre-tax profits of £1.8m before provisions against stock of £5.3m, a net loss before tax of £3.5m.

Following this sale, non-core assets comprise 4% of the Helical’s total portfolio. The group’s core focus remains on high-quality London and Manchester offices and the logistics sector. 

Gerald Kaye, chief executive of Helical, said: “Whilst we have generated good profits in the past from our retirement village portfolio we firmly believe that now is the right time to sell our interests, reduce our gearing and focus solely on our core sectors where we expect to be able to generate stronger Shareholder returns in the future.”

L&G added Inspired Villages would continue to seek to acquire several land sites a year.  

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