Korian enters into a long-term real estate equity partnership with BAE Systems Pension Funds


PARIS–(COMMERCIAL THREAD) – Regulatory news:

Korian (Paris: KORI), the leading European group providing care services for the elderly and frail, entered into a long-term investment partnership in December 2021 with BAE Systems Pension Funds advised by Elevation. Korian will be the asset and property manager of the real estate structure and will continue to consolidate the structure in its accounts.

BAE Systems pension funds invest in real estate, infrastructure, alternative assets and other private markets globally, in addition to listed equities and fixed income securities. Elevation is a manager of healthcare real estate investments.

BAE Systems pension funds have invested around € 100 million of equity in a real estate portfolio of 23 long-term care and healthcare assets, including retirement homes, post-treatment and healthcare clinics mental health in France, Germany and Spain. The partnership includes one virgin site and four assets undergoing redevelopment.

The portfolio has a net worth of approximately EUR 200 million, including a portfolio structuring commission and based on the valuation of Cushman & Wakefield (blended capitalization rate of approximately 4.9%) and an LTV (loan to value) of around 38% in December. 2021. Further investment investments in entirely new and redeveloped sites planned between 2022 and 2024 will bring the overall gross value of the portfolio to around 320 million euros.

This long-term partnership has a structure similar to that set up in 2020 with BNP Cardiff and EDF Invest, in the form of a 15-year partnership with a possible extension and a minimum blocking of 7 years for BAE pension funds. Systems. The expected remuneration is around 4.5% per year, with a floor and a ceiling on the exit yield, which allows Korian to benefit from any significant increase in the value of the real estate portfolio above the ceiling on the long term.

This new agreement confirms the group’s ability to capitalize on its attractive and liquid existing portfolio and to regularly raise equity financing in order to support real estate investments linked to its sustained development dynamic, while maintaining a prudent Loan to value ratio. (55% or below).

Korian’s real estate strategy, launched in 2016, more than tripled the value of its real estate portfolio to 2.9 billion euros as of June 30, 2021, for 25% of the network operated in Europe.

Korian has also been able to build a coherent new construction pipeline, representing around 120 projects to date, drawing on internal expertise and forging partnerships with developers and investors.

Korian continues to invest in real estate, in order to serve its growth ambitions. The real estate portfolio is expected to reach € 4 billion by 2023, consisting of blue chip assets in key locations across Europe.

About Korian

Korian, the leading European group providing care services for the elderly and frail. www.korian.com

Korian has been listed on Euronext Paris Section A since November 2006 and is part of the following indices: SBF 120, CAC Health Care, CAC Mid 60, CAC Mid & Small and MSCI Global Small Cap

Euronext symbol: KORI – ISIN: FR0010386334 – Reuters: KORI.PA – Bloomberg: KORI.FP


Comments are closed.