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Target Healthcare REIT posts 7% NAV total return

Target Healthcare REIT to raise £50m in placing

Care home investor Target Healthcare REIT has reported a net asset value (NAV) total return for the year to 30 June 2020 of 7.0%.

The group posted a 0.6% increase in EPRA NAV per share to 108.1p. Its dividend for the year grew 1.5% to 6.68p and it is proposing a further 0.6% increase for 2021 to 6.72p.

The dividend was covered by EPRA earnings, but was just 76% covered by adjusted EPRA earnings.

IFRS profit for the year was £31.6m (2019: £29.9m).

Portfolio highlights

Portfolio value grew by 23% to £617.6m, with like-for-like valuation growth of 2.8%. The portfolio now comprises 71 care homes and two pre-let sites.

Contracted portfolio rent increased 21% to £39.0m, including like-for-like rental growth of 1.5%. The weighted average unexpired lease term (WAULT) was maintained at 29 years.

The group has collected 95% of rent due on the March and June quarter dates. It said the reduction in occupancy levels witnessed during the COVID-19 pandemic, due to restricted viewings, is now being “substantially matched” by new enquiries.

Chairman comments

Malcolm Naish said: Our business model is designed to allow us to pay a regular, stable and attractive dividend in what may well be an entrenched “lower-for-longer” interest rate environment. Our portfolio has performed well during the year, and has thus far demonstrated a satisfying resilience during COVID-19. We have seen rental and valuation growth. Falls in occupancy levels as a result of lockdown are being substantially matched by new enquiry levels.

“The proposed dividend increase reflects both the board’s confidence in the group’s prospects and caution with regard to the ongoing COVID-19 situation.”

THRL : Target Healthcare REIT posts 7% NAV total return

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