Target Healthcare REIT Reports Strong Annual Results

Strategic Insights -

Target Healthcare REIT has posted impressive annual results, with a net asset value (NAV) total return of 11.8% for the year ended 30 June 2024. The care home landlord reported a 5.9% uplift in EPRA net tangible assets (NTA) to 110.7p per share, driven by a 4.6% increase in the value of its 94-home portfolio to PS908.5m. Adjusted EPRA earnings per share increased 2.2% to 6.13p per share, fully covering annual dividends of 5.712p.

Key Takeaways:

  • Target Healthcare REIT reported a NAV total return of 11.8% for the year ended 30 June 2024, driven by a 5.9% uplift in EPRA net tangible assets (NTA) to 110.7p per share.
  • The company's 94-home portfolio increased in value by 4.6% to PS908.5m, primarily due to a 4.0% increase in contracted rent to PS58.8m, including a like-for-like increase of 3.8%.
  • The company maintained one of the longest weighted average unexpired lease terms in the listed UK real estate sector of 26.4 years (2023: 26.5 years).
  • Net loan-to-value (LTV) was 22.5% as at 30 June 2024, with an average cost of drawn debt of 3.91% and a weighted average term to maturity of 5.2 years.
  • Three newly developed care homes were added to the portfolio, with two additional homes (126 beds) under development at year end.
  • The company disposed of four older assets with the shortest remaining lease terms in the portfolio, realizing PS44.3m.
  • Adjusted EPRA earnings per share increased 2.2% to 6.13p per share, fully covering annual dividends of 5.712p.

Statistics:

  • NAV total return: 11.8% (year ended 30 June 2024)
  • EPRA net tangible assets (NTA) uplift: 5.9% (year ended 30 June 2024)
  • Portfolio value: PS908.5m (year ended 30 June 2024)
  • Contracted rent: PS58.8m (year ended 30 June 2024)
  • Mature homes rent cover: 1.9x (year ended 30 June 2024)
  • Mature homes spot occupancy: 87% (year ended 30 June 2024)
  • Weighted average unexpired lease term: 26.4 years (year ended 30 June 2024)
  • Net loan-to-value (LTV): 22.5% (as at 30 June 2024)
  • Average cost of drawn debt: 3.91% (as at 30 June 2024)
  • Weighted average term to maturity: 5.2 years (as at 30 June 2024)
  • Number of newly developed care homes: 3 (added to the portfolio in the year ended 30 June 2024)

Sources:

  • Target Healthcare REIT press release, dated 30 June 2024.