CareTrust REIT Buys £1.1 Billion UK Care Home Portfolio From LNT

CareTrust REIT, which invests in senior living and healthcare property, has bought a portfolio of UK care homes for £1.1 billion, according to Bisnow. The seller is LNT, a care home developer and operator. The portfolio has 2,970 beds. The deal takes CareTrust's UK holdings to £2.9 billion and more than 12,000 beds. CareTrust bought into the UK only last year.

The purchase is split in two. CareTrust will pay £576 million for 24 homes that are already complete. It will pay £504 million for the remaining 21 homes, and will buy them as they are finished through 2027.

All the homes will be leased to Crystal Care, LNT's care home operating company. The leases run for 20 years on a triple-net basis, where the tenant covers most property costs. Rent rises 3% a year while the homes fill with residents, a period CareTrust expects to last two to four years. Each home will pay annual rent of £1.4 million.

Once homes are full and stable, they will move to a different structure under the REIT Investment Diversification and Empowerment Act. That lets a REIT share in the operating income a care home produces. According to CareTrust, the two steps give it guaranteed income while homes fill, and a share of higher income once they are running. The portfolio should reach a 7% yield when fully operational. CareTrust's UK income would rise from £74 million to £171 million, on the assumption that each asset produces £2.15 million.

Martin Robb, CareTrust's senior vice president of investments, spoke at a Bisnow conference on Sept. 29, before the deal was announced. "My experience of American capitalism is that it's way more efficient than UK capitalism," he said. "The fundraising capability is impressive." He argued that more liquid and efficient capital markets give US buyers an edge over UK and European rivals. That is his personal view, spoken about US buyers in general rather than about this deal, and he is a buyer with a stake in the market. Robb was a director at Care REIT, which CareTrust bought for £634 million last year in its first UK deal.

The geography matters for policy and for need. About 42% of the homes are in the south of England, 27% in the Midlands, 11% in the north west and 9% in the east of England. Robb said the areas outside the wealthy south east have the greatest need for new places, but the economics make it hard to invest there. "We would like to invest in deprived areas as well if we could figure out how to do it," he said. The pattern suggests private capital follows returns, which may not match where care is most needed.

Wider demand is strong despite weak UK investment markets. Bisnow points to an ageing population and to inflation-linked leases. JLL Director Verity Knight said she had bid on three opportunities below 5% in recent weeks. That is below current gilt yields. "Certain investors still do really see value long term in this market," she said.

For UK operators and domestic landlords, the competitive pressure may be real, though this is our reading rather than something the source shows. Knight's sub-5% bids are not identified as coming from US buyers, and Robb's point concerns efficient fundraising, not cheap money. The weakest link in the argument is that we are joining the two. Whether any of this benefits residents depends on how the homes are run, which the source does not address. What to watch next: how quickly the 21 unfinished homes are delivered through 2027, whether Crystal Care fills them within the expected two to four years, and whether any investors find a workable model for less affluent areas.