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Target Healthcare REIT cuts fees


Target Healthcare REIT cuts fees – Target Healthcare REIT has published results for the year ended 30 June 2018.


  • EPRA NAV per share up 3.7% to 105.7p (2017: 101.9p) translating into an NAV total return of 10.5% (2017: 7.8%)
  • EPRA earnings per share up 8.5% to 5.25p (2017: 4.84p)
  • Dividend increased by 2.7% to 6.45p (2017: 6.28p)
  • Dividend cover of 82% (2017: 83%)
  • Portfolio rent of £26.0m (2017: £20.3m)
  • Number of tenants grown to 21 (2017: 16)
  • Weighted average unexpired lease term (‘WAULT’): 28.5 years (2017: 29.5 years)

Malcolm Naish, chairman, said: “Our approach to care home investment is focused on the quality of the physical asset, alongside a comprehensive assessment of tenant capabilities before and after investment. The manager continues to see acquisition opportunities which are attractive based on long-term sustainability of rental income and their ability to contribute to the diversification of the portfolio.”

The board says that it remains committed to its strategy to provide a progressive dividend, with an increase to the quarterly dividend in respect of the year ending June 2019 of 2.0% to 1.64475p, providing an annual total of 6.579p which reflects a dividend yield of 5.8% on the share price of 112.5p as at 2 October.

Fee changes

The board has agreed with the manager to amend the management fee arrangements, moving to a tiered fee basis which has the benefit of reducing rates at increasing NAV levels and allows shareholders to benefit from the increasing economies of scale that a larger portfolio provides. In addition, the performance fee will be removed as the board does not believe it provides effective and long-term alignment and creates additional financial uncertainty. The new arrangements will provide a significantly lower fee for shareholders than that achieved each year since launch, which has averaged 1.23% per annum and should help support their objective of providing shareholders with progressive and sustainable dividends. The new fee is 1.05% on the first £500m, 0.95% on the next £250m, 0.85% on the next £250m, 0.75% on the next £500m and 0.65% on any balance.

THRL : Target Healthcare REIT cuts fees

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