Financing secured for 8 properties in TSC Fund – Eurocare IV

Société Générale provides €53.5m loan for nursing home portfolio
Debt facility to finance six centres in Germany and two in Spain.

Article published in React News by Elena Dragulele

What - Société Générale has provided a €53.5m loan to Threestones Capital
Why - The debt facility will finance the acquisition of six care homes in Germany and refinance two nursing homes in Spain
What next - Threestones Capital will continue investing in the residential sector in Germany, Italy and Spain

Société Générale has provided a €53.5m loan to support Threestones Capital’s expansion into care homes across Europe, React News can reveal.

The loan will fund the acquisition of six nursing homes in Germany and the refinancing of two nursing homes in Spain for Threestones Capital’s Eurocare IV investment vehicle.

The facility was arranged by Westfort Advisors and is the first cross-border CRE debt financing in the nursing home sector this year.

Eurocare IV was launched last year by the boutique alternative investment manager to targets existing care home properties as well as prelet development and forward deals in Germany, Italy and Spain.

Fernando de Galainena, head of real estate structured finance at Société Générale, Spain said: “This is the first transaction of Société Générale with Threestones Capital and our idea is to continue supporting them with their healthcare strategy around Europe.”

The transaction has increased the fund’s portfolio by 800 beds, bringing its current total to over 6,500 beds and nearing €2bn in assets under management. All of the properties are let on long-term leases to care operators.

Beka Pipia, portfolio manager at Threestones Capital, said: “The specificities of healthcare real estate have guaranteed significant resilience to the asset class during these unusual macroeconomic times, characterised by high inflation, slowing growth and a commodity shortage. We expect the demand by large institutions for the segment to continue to grow as they get increasingly allured by the inflation-indexed cash flows and affirming demographic trends.”

Deepak Drubhra, co-founder of Westfort Advisors, said: “We are confident that this structure will enable Threestones to increase its portfolio across Germany and Spain. We are also grateful to the Société Générale team for their support and pragmatism throughout the process, and execution of a market-clearing financing package.”

Recently acquired asset in Spain by Threestones Capital

In the second quarter of 2022, healthcare properties in Germany were traded for approximately €569m, according to research by Savills.

The prime yield for nursing homes is unchanged at 3.9%. In particular, many full-equity investors are looking intensively for healthcare properties with a creditworthy operator and are willing to pay competitive prices.

Threestones Capital were advised by K&L Gates (legal, Germany), Pavia- Ansaldo (legal, Spain), and Westfort Advisors (debt).

Société Générale were advised by Ashurts (legal), Euro Transaction Solutions (insurance) and Savills (valuation).