Charles Russell Speechlys’ real estate team in Guildford has advised CareTech Holdings plc, one of the leading providers of specialist care in the UK, in an innovative transaction to raise £30 million in cash to fund its next growth phase. Under the terms. Under the terms of the agreement, the freehold to 41 CareTech properties, predominantly in London and the South East, have been transferred to Alpha Real Capital’s managed funds in exchange for cash and new ground rent leases for a 150 year term at a yield of 3.4%.

Whilst ground rent transactions are common in the hotel and leisure industries, the CareTech transaction is the first of its kind in the healthcare sector. Charles Russell Speechlys advised CareTech on all legal aspects including commercial lease structuring, contract and revenue arrangements. Knight Frank arranged the deal.

According to Debra Kent, real estate partner at Charles Russell Speechlys who advised CareTech: "The transaction was complex and consequently took some time to complete, but our extensive experience in the healthcare sector stood us in good stead. We found it very interesting to work on because we were setting new precedents in this ground-breaking area. CareTech has secured significant funds to re-invest in the business and I am certain that other care home operators will replicate this model when seeking ways of funding their own growth plans."

Farouq Sheikh, executive chairman of CareTech added: "We worked closely with Charles Russell Speechlys and Knight Frank to achieve this excellent outcome for our shareholders. We look forward to deploying the funds raised and have already identified a number of potential earnings-enhancing acquisition opportunities, which we believe will meet the evolving requirements of care commissioners along with our own growth criteria.”