The owner-managed Dr. Peters Group has signed long-term follow-up leases with the operator EMVIA Living GmbH for the properties from three active closed-end nursing home funds. For the properties of the DS 40, DS 42 and DS 44 funds, the leases were not only agreed for 20 years each plus extension options of two 5-year extensions, but also a clear investment plan for the properties was anchored. This means that the three properties in Aschersleben (Salzlandkreis; Fonds DS 40), Tangerhütte (Stendal district; Fonds DS 42) and Coswig (Wittenberg district; Fund DS 44) will now be rented out stably until at least 31 December 2044 and will ensure the sustainable operation of the homes through the investments to be made.
Funds make investments from forward-looking reserves
In constructive and cooperative negotiations, the fund companies and the tenant agreed to make substantial joint investments in the modernisation and thus in the future viability of the buildings. Over the next five years, both sides will invest a total of €3.3 million in the property in Aschersleben, €1.4 million in the property in Tangerhütte and €2.0 million in the nursing home in Coswig. Of the total €6.7 million, the fund companies are contributing €3.5 million, while EMVIA Living is investing the remaining €3.2 million. The contributions to be made by the fund companies have been saved as reserves in advance, so that no new loans have to be taken out for the investments: after the complete debt relief of the companies has already taken place in 2024, the funds will remain debt-free in the future.
To identify the investments to be recommended, the consulting firm soleo*, which specialises in social and healthcare real estate, was commissioned. The experts prepared inventory reports for the properties and created concepts for a respective investment plan. The aim was to meet EMVIA Living's operational requirements as well as to ensure that appropriate care services can be provided to the residents in the long term.
Fabian Schultheis, Head of Real Estate at Dr. Peters Group, says: "I am very pleased that in a market environment that is still characterized by numerous imponderables, we have succeeded in concluding leases for the three properties in Saxony-Anhalt for at least another 20 years and at the same time reaching agreement on the necessary investments. I would like to thank our business partner for the factual, cooperative and professional discussions, which ultimately led to mutual success. Our goal has always been to maintain sustainable profitability for our investors."
Leases with stable value and potential for growth
In fact, investors benefit from the agreements reached not only because the three properties are leased for another 20 years, but also through the indexation of the leases, which enable secure and stable cash flows. In addition, the rents are linked to the investment costs, so that thanks to successful negotiations between EMVIA Living and the care insurance companies, these are already above the minimum level of the rental agreement. If the fixed investments in the properties also increase operator-side refinancing, the fund companies will again participate in rising rents. As a result, the funds will continue to make attractive annual distributions of 5% to 7% while building up a liquidity reserve. In the spirit of sustainable success.
