A specialist healthcare investor is looking to raise £50 million and gain admission to the London Stock Exchange’s main market by establishing a real estate investment trust focused on the care home sector.

Target Healthcare REIT will tomorrow announce a placing of a minimum of 45 million ordinary shares, at 100 pence per share, and expects dealings to commence on 7 March. The offer period closes on 4 March 2013.

Dickson Minto is acting as sponsor and legal advisor to the issue, and Winterflood Securities is acting as broker.

Target Healthcare said it will invest the proceeds of the placing in a portfolio of purpose built care homes, with rents “set at a level based on a sustainable trading performance”. 

The REIT will contract Target Advisers, which has previously invested more than £75 million in UK care home assets via the Kames Target Healthcare Fund, to source and actively manage high quality properties for the fund.

The company expects to be fully invested within a period of six months after admission, and has agreed non-legally binding indicative terms to acquire a portfolio of three properties for a consideration in the region of £14 million.

Target Healthcare is “confident the demand for quality care homes in the UK, driven by demographic and supply issues, can deliver returns to investors of 6% per annum in dividends once fully invested.

It is expected that dividends will be paid quarterly and will be fully covered once fully invested. The shares will be eligible for inclusion in ISAs and Self Invested Personal Pensions (SIPPs).

The board of directors of Target Healthcare REIT will comprise Malcolm Naish, chairman, who is the former head of real estate at Scottish Widows Investment Partnership; Gordon Coull, a former partner of the asset management practice of Ernst & Young where he specialised in investment trusts and property; Professor June Andrews, director of Dementia Services Development Centre, Stirling, a world renowned dementia specialist; and Tom Hutchison, who has considerable experience in the US healthcare market.

Kenneth MacKenzie (pictured), managing partner of Target Advisers, said: “We are delighted to have already received strong support from potential investors and we are confident that we will raise £50 million.

“The Target Healthcare REIT strategy is all about investing in best-in-class care homes and operators over the long term, creating stable inflation-linked returns from a sensible, measured investment strategy.