Impact Healthcare REIT, which owns a portfolio of UK healthcare real estate assets, has reported a slight increase in its net asset value (NAV) in the three month period to the end of December 2019.
The group’s NAV at 31 December 2019 was £340.7m or 106.81 pence per share, compared to £303.7m or 106.00 pence per share at 30 September 2019.
It beat its NAV total return target of 9% per annum during the year, recording a NAV total return of 9.46%, composed of dividends paid in the year and 3.63 pence per share growth in NAV.
The group’s property portfolio was valued at £318.8m at 31 December 2019 (September 2019: £310.6m), an increase of £8.2m or 2.6% in the quarter. This included a £2.7m deferred incentive payment to a tenant in return for an uplift in rent at a yield of 8% which was accretive to shareholder returns whilst maintaining strong rent cover at the home.
Portfolio
At 31 December 2019, the portfolio comprised 86 healthcare properties, of which 84 are care homes let to eight tenants on fixed-term leases of 20 to 25 years (with no break clauses), subject to annual upward-only Retail Price Index-linked rent reviews (with a floor and cap at 2% p.a. and 4% p.a., respectively). The other two properties are healthcare facilities leased to the NHS.
The portfolio’s weighted average unexpired lease term is 19.7 years and has an annualised contracted rent roll of £23.1m.
The company raised £35m in an equity issue, announced in December, and is expected to exchange contracts to acquire a number of properties in the first quarter of 2020.
Dividend
The board has declared the company’s fourth and final interim dividend for the year ended 31 December 2019 of 1.5425 pence per ordinary share, payable on 22 February 2020 to shareholders on the register on 7 February 2020. The ex-dividend date will be 6 February 2020.
The dividend means the company has delivered on its target of paying a dividend of 6.17 pence per share for the year ended 31 December 2019.
The board has declared its target total dividend for 2020 is 6.29 pence per share, a 1.94% increase on 2019.
Chairman’s comments
Rupert Barclay, chairman of Impact Healthcare REIT, said: “The board is pleased by the good progress made by the company over the past year. The company’s portfolio of UK residential care homes and growing number of high-quality tenants, who offer an essential regulated service and provide good care, continue to deliver investors secure inflation-linked and attractive income for the long-term with the potential for income and capital growth. This has provided an unaudited NAV total return of 9.46% for the period, ahead of target.
“The £35m of equity raised by the company in December last year, in addition to the remaining headroom on its £50m of debt facilities, leave the company well-placed to continue to diversify its portfolio by geography and by tenant by adding further experienced operators from its pipeline of near term opportunities.“
IHR : Impact Healthcare REIT’s NAV nudges up