TIDMJLG
RNS Number : 7532U
John Laing Group plc
08 April 2021
8 April 2021
INVESTMENT UPDATE
John Laing invests in specialised accommodation platform in the
UK
John Laing Group plc ("John Laing" or the "Group"), the
responsible investor and active manager of infrastructure projects
internationally announces that it has entered into an agreement
(the "Transaction") to create a UK-based platform to invest in
retirement accommodation.
Under this Transaction, Brigid Investments Limited (the
"Platform"), in which John Laing and Macquarie Capital are each 50%
shareholders, will invest in purpose-built , completed and let
retirement living units developed in partnership with McCarthy
Stone, the UK's leading developer and manager of retirement
communities.
The Platform has selected and secured a high quality and
geographically diverse pipeline of units, with approximately 250
completed units to be acquired on financial completion of the
Transaction. In addition, approximately 400 further completed and
let units will be acquired over the next 12 months. Taken together,
these represent an investment commitment for John Laing of
approximately GBP50 million. Financial completion of the
Transaction is expected to take place in the second quarter of
2021, subject to a number of conditions, including customary
consents and execution of the agreed property documentation. The
Platform also benefits from an additional agreement with McCarthy
Stone which provides an option, subject to certain conditions, to
acquire follow-on investments in a further approximately 500 units
within three years following financial completion.
Ben Loomes, Chief Executive of John Laing Group plc,
commented:
"We are delighted to be partnering with McCarthy Stone, the UK's
leading developer and manager of retirement communities, and
creating a platform for growth with Macquarie Capital's
infrastructure investment team. Retirement-living is a market with
high barriers to entry and strong fundamentals, underpinned by an
ageing population and constrained supply.
This investment is in-line with our strategy of investing in
platforms which are asset-backed, scalable and offer long-term,
resilient cash flows. Importantly, this investment brings
inflation-linked revenues and strong cash yield from the outset.
There is potential for significant value creation both through
scaling the platform, and as the sector matures and attracts
further institutional capital into core infrastructure assets.
So far this year, we have announced realisations of three
investments, each at a premium to book value, for total proceeds of
GBP110 million [1] , and in the same period, we have committed to
total new investments of approximately GBP107 million [2] at
attractive returns."
In-line with strategy with strong contribution to portfolio
yield
John Laing is investing in a scalable platform, backed by real
assets. As well as offering growth potential, the Platform offers
strong and long-term inflation-linked cash income to the Group,
with a strong cash yield from financial completion.
In particular, John Laing's investment in the Platform delivers
the following:
-- Growth potential: ability to scale the Platform through
aggregating a diverse portfolio of units under an arrangement with
the UK's leading developer of retirement accommodation.
-- Asset intensive: the Platform is acquiring real assets which
provide a strong underpin to the investment.
-- Long-term, resilient cash flow: high credit quality tenants
and visibility of cash flows, underpinned by structural undersupply
of rental units in the UK.
-- Essential services with a positive social impact: the
Platform aims meet the growing needs of an ageing population
looking for independence and a sense of community in their later
years, as well as offering the increased flexibility that a rental
model provides.
Experienced partners and management
John Laing has a proven and long-term track record of investing
in specialised accommodation and in broader social infrastructure
in the UK and internationally. The Group has successfully invested
in, and delivered, projects including hospitals and wider
healthcare facilities, housing, and student and military
accommodation.
We are pleased to be partnering with Macquarie Capital, who also
bring strong credentials and experience of investing in development
infrastructure, including in the accommodation sector. McCarthy
Stone, a market-leading partner with a strong brand, reputation and
track record in the retirement sector, will provide operating and
management services to the Platform.
Richard Williams has been appointed as Chief Executive Officer
of Brigid Investments Limited. Richard brings over 20 years of real
estate and property experience, including at Aldi, as Regional
Managing Director with McCarthy Stone, and as Chief Executive of
Rangeford Retirement Living & Care.
Strong sector fundamentals
Retirement-living in the UK is a market with high barriers to
entry and strong fundamentals. The market is undersupplied, with a
shortage of appropriate and affordable options. The gap between
supply and demand is also set to widen as a result of a growing
ageing population. There are currently approximately 12.2 million
people in the UK who are aged 65 years or over, and which is
expected to rise to approximately 17.4 million by 2043,
representing an increase of over 40%. [3] Research undertaken by
McCarthy Stone shows that a third of those aged 65 years or over
are interested in moving, equating to approximately 4 million
people.
Retirement living penetration in the UK currently lags other
markets such as the US and Australia. For example, the US has a
well-established rental model, with rental accounting for the
majority of senior housing stock. There is potential for
significant value creation both through scaling the Platform, and
as the asset class matures into core infrastructure, which is
attractive to second market investors given the stable and
long-term yield characteristics. For example, there is already an
established secondary market for retirement living assets in
Europe.
ENDS
Analyst & investor enquiries:
Kellie McAvoy Head of Investor Relations +44 (0) 7923 249298
Media enquiries:
Tashi Lassalle Director of Communications +44 (0) 7923 249384
Tulchan:
+44 (0) 20 7427
Olivia Peters 5494
About John Laing
John Laing is a leading international investor across a range of
infrastructure sectors. We seek deliver attractive and sustainable
returns over the medium-term. We are a responsible investor,
committed to delivering critical and enduring infrastructure which
responds to public needs and improves the lives of the communities
we serve.
[1] For the purpose of the special dividend, gross proceeds will
be adjusted to exclude any interest earned.
[2] As committed; actual cash investment amount subject to
future foreign exchange movements.
[3] Population data sourced from ONS
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