Target Healthcare REIT, the care homes investor, delivered a net asset value (NAV) total return for the year ended 30 June 2021 of 8.8%.
EPRA net tangible assets (NTA) was up 2.1% to 110.4p per share, while the group paid out dividends of 6.72p. The dividend (which was up 0.6% on 2020) was not fully covered by adjusted EPRA earnings of 5.46p per share, however.
The group’s portfolio valuation was up 3.8% on a like-for-like basis, and 10.9% overall including new acquisitions to £684.8m. Acquisition commitments during the year totalling £70m, taking the portfolio to 77 properties, consisting of 73 operational care homes and four pre-let development sites.
Contractual rent increased by 5.6% to £41.2m per annum (2020: £39.0m), with the assets that were subject to rent review in the period delivering an average increase of 1.8%. The group collected 95% of rent during the year.
During the year Target completed a £60m equity issuance (in March 2021) and post-period end (on 10 September 2021) raised a further £125m as the group looks to grow further.
It has a low net loan-to-value (LTV) ratio of 15.9% as at 30 June 2021, with an average cost of drawn debt of 2.9% and an average term to maturity of 4.8 years.
Malcolm Naish, chairman, said: “We are once again pleased to have achieved our key objectives: stable investment returns provided to shareholders and excellent care home real estate to our tenants and their residents. It is crucial to us that our longstanding approach is “doing the right thing” through the provision of fit-for-purpose care facilities which are also comfortable living, visiting & social spaces. Our business model, which prioritises stability of returns, and our portfolio resiliency were fundamentals which stood out strongly during a period of uncertainty. We own real estate of the highest standards and build relationships with tenants who have proven to be capable of caring for residents and operating commercially well through the most challenging of conditions.
“Our recent £125m equity issuance, alongside additional debt capacity, allows us to add further assets to the portfolio, including our first significant portfolio of 18 assets which will deliver £9.1m of annual rent immediately following completion of the acquisition, expected imminently.
“The board remains confident in the group’s prospects, whilst remaining cautious and patient with respect to the portfolio returning to normalised trading levels. Our strategy and decisions will reflect our commitment to being a long-term backer of our tenants and the social care sector, doing so in a responsible and supportive manner.”
THRL : Target Healthcare REIT delivers 8.8% NAV total return