Supported living joint venture
Shore Capital, the independent investment group specialising in capital markets, principal finance and asset management, announces a new joint venture focused on real estate opportunities in the supported living sector, called Puma Social Care Investments Ltd (“PSCI” or the “joint venture”).
PCSI has secured equity commitments totalling £21 million, to be contributed equally from the Group alongside two family offices in the United States. Shore Capital’s commitment of £7 million will be partly provided through the injection of £5.8 million of supported living assets already held on the Group’s balance sheet. The balance of the consideration will be funded from group reserves.
PSCI has been established to acquire newly built or converted assets which provide residential accommodation in the form of self-contained apartments for individuals with learning disabilities, enabling them to live independently with the support of on-site care. Accommodation of this nature allows local authorities in the United Kingdom to meet their statutory obligations with regard to care and housing provision, while also addressing the UK government’s stated desire to locate individuals needing care within their local community. Each site will typically have between 10 and 20 units.
The assets targeted will benefit from long-term, typically 25 or 30 year, inflation-linked leases to a variety of housing associations. Rental income paid from housing associations will be funded from Housing Benefit payments from central government.
PSCI intends to acquire an identified initial pipeline of assets with an aggregate value of £50 million. There is a substantial opportunity to grow the asset base further, once the first tranche of purchases have been completed.
In executing PSCI’s strategy, the Group will be providing advisory services to the joint venture, through its majority-owned subsidiary Puma Investment Management Ltd (“PIML”). The Group has extensive experience in the real estate sector gained through many years of advising property investment vehicles. PIML will be applying the expertise it has developed in the supported living sector in recent years, through its management and advisory services to funds and companies that have provided funding for supported living developments.
As Investment Advisor to the joint venture, PIML will charge an annual advisory fee equal to 0.85% of the gross value of properties held by the joint venture, as well as an acquisition fee on each property purchase of up to 1.0% of the purchase price.
Commenting on the joint venture, David Kaye, CEO of Asset Management, said:
“This new joint venture continues the expansion of our asset management activities and will deploy the Group’s considerable real estate expertise into a sector where innovative new solutions are much needed. By committing capital to supported living assets, we will enable housing associations in the UK to lease high quality facilities and provide important local services.”
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David Kaye, CEO of Asset Management
+44 (0) 20 7468 7911
Grant Thornton UK LLP (Nominated Adviser)
+44 (0) 20 7383 5100
Bell Pottinger (Public Relations)
+44 (0) 20 3772 2500
About Shore Capital
Shore Capital is an AIM quoted independent investment group. Founded and majority owned by entrepreneurs, for three decades Shore Capital has been helping entrepreneurial businesses reach their full potential, find committed long term investors and develop into significant enterprises. The business offers innovative corporate advice; a leading market-making business; some of the most respected investment research available in the UK; and a diverse range of high quality investment opportunities, including its hugely successful VCTs and principal finance activities.
The Group is based in Guernsey, London, Liverpool, Edinburgh and Berlin. Shore Capital Stockbrokers Limited, Shore Capital and Corporate Limited, Shore Capital Limited and Puma Investment Management Limited are each authorised and regulated by the Financial Conduct Authority. Shore Capital Stockbrokers Limited is a member of the London Stock Exchange.