Quarterly Investor Report: | April 2021 |
Quarter ended 31 March 2021 |
Target Healthcare REIT plc and its subsidiaries ('the Group') is a leading investor in modern purpose-built UK care homes with ensuite wet rooms. The Group aims to provide investors with an attractive quarterly dividend generated from a portfolio diversified by tenant, geography and end-user payment profile.
Group at a glance
Properties | Beds | Tenants | Contracted rent | Property Value |
75 | 5,211 | 27 | £40.3m | £650.8m |
Overview | Key ratios & financials | ||||||||
Launch date | March 2013* | Investment properties | £650.8 million | ||||||
ISIN | GB00BJGTLF51 | Drawn debt | £114.0 million | ||||||
SEDOL | BJGTLF5 | EPRA NAV | £558.3 million | ||||||
Company name | Target Healthcare REIT plc | EPRA NAV per share | 109.1 pence | ||||||
Registered number | 11990238 | Quarterly NAV total return | 2.5% | ||||||
(including dividend) | |||||||||
Expected quarterly dividend | Feb/May/Aug/Nov | Quarterly Group specific | 1.38 pence | ||||||
Financial year end | 30 June | adjusted EPRA earnings per | |||||||
share | |||||||||
Currency | Sterling | Quarterly dividend per share | 1.68 pence | ||||||
Website | www.targethealthcarereit.co.uk | Dividend yield (26/04/2021) | |||||||
5.7% | |||||||||
Ordinary share class as at | 26/04/2021 | Loan-to-Value ('LTV')** | 17.5% (gross); 13.4% (net) | ||||||
Shares in issue | 511,541,694 | Management fee rate | 1.05% up to £500m NAV | ||||||
Share price | 117.6 pence | 0.95% of £500m - £750m NAV | |||||||
0.85% of £750m - £1,000m NAV | |||||||||
Market cap | £601.6 million | 0.75% of £1,000m - £1,500m NAV | |||||||
0.65% of £1,500m + NAV | |||||||||
Share price premium to EPRA | 7.8% | WAULT | 28.6 years | ||||||
NAV | |||||||||
**Gross LTV calculated as total gross debt as a proportion of gross | ||||
property value. Net LTV calculated as total gross debt less cash, as a | ||||
* originally launched as Target Healthcare REIT Limited (Jersey | ||||
proportion of gross property value | ||||
registered: 112287) | ||||
Recent news
The Group's oversubscribed placing in March raised gross proceeds of £60 million, allowing us to continue our mission to support the sector through investment in modern, purpose- built care homes. We have heard powerful first-hand accounts from care home staff relating how the standards of our real estate were essential in their efforts to protect the wellbeing and dignity of residents through the COVID-19 pandemic. COVID-19 cases remain low in the portfolio (<1% of beds), with all homes offered the first vaccine dose and the vast majority having had access to the second dose. Occupancy across the mature portfolio has stabilised in recent weeks, with recovery anticipated during 2021 based on demand as evidenced from the enquiry levels reported by our tenants.
Performance
The portfolio value increased by 0.5% over the quarter. This comprised a 0.7% increase from further investment into the development portfolio, a 1.2% decrease due to asset disposals, and a like-for-like uplift in the operational portfolio value of 1.0%. The latter movement reflects a combination of yield tightening, the portfolio's inflation-linked rental reviews and the results of asset management initiatives.
Asset Management and Acquisitions
Substantially all capital available for investment, inclusive of March's equity proceeds, has been allocated to acquisitions, with these transactions advanced to formal due diligence ahead of expected completion in the near term. In the quarter, the disposal of one asset (c.1% of portfolio value) realised sale proceeds ahead of both carrying value and cost. An asset was re-tenanted from a national operator to a family-owned operator on a lengthened lease term, providing a net valuation uplift and better positioning the home for the future.
Pipeline
The investment market for high quality, modern, fit-for- purpose assets which meet the Group's investment criteria remains very competitive. Strong investor appetite continues, with the best properties transacting at pre-COVID-19 pandemic pricing. The Investment Manager, as well as working through the diligence process on transactions which will see the equity proceeds invested, is also assessing several earlier stage opportunities as the anticipated uptick in the development of fit-for-purpose care homes following COVID- 19 becomes more apparent.
Summary balance sheet
£m | Mar-21 | Dec-20 | ||||
Property Portfolio*** | 650.8 | 647.7 | ||||
Cash | 26.6 | 18.3 | ||||
Net current assets/(liabilities) | (5.1) | (9.2) | ||||
Bank Loans | (114.0) | (162.0) | ||||
Net assets | 558.3 | 494.8 | ||||
EPRA NAV per share (pence) | 109.1 | 108.2 | ||||
***Ignores the effect of fixed/guaranteed rent reviews. See note 9 to the Annual Report 2020 for full details.
Performance - NAV and share price total return
185 | ||||||||||||||||||||||||||||
175 | NAV total return | |||||||||||||||||||||||||||
165 | ||||||||||||||||||||||||||||
155 | Share price total return | |||||||||||||||||||||||||||
145 | ||||||||||||||||||||||||||||
135 | ||||||||||||||||||||||||||||
125 | ||||||||||||||||||||||||||||
115 | ||||||||||||||||||||||||||||
105 | ||||||||||||||||||||||||||||
95 | Jun-13 | Sep-13Dec-13Mar-14Jun-14Sep-14 | Dec-14 | Jun-15 | Sep-15 | Dec-15 | Jun-16 | Sep-16 | Dec-16 | Jun-17 | Sep-17 | Dec-17 | Jun-18 | Sep-18 | Dec-18 | Jun-19 | Sep-19 | Dec-19 | Jun-20 | Sep-20 | Dec-20 | |||||||
Mar-13 | Mar-15 | Mar-16 | Mar-17 | Mar-18 | Mar-19 | Mar-20 | Mar-21 |
Portfolio summary at 31 March 2021
Number of properties by geographic region | |||
Scotland | North East | ||
Northern Ireland | Yorkshire & The Humber | ||
North West | East Midlands | ||
Wales | East of England | ||
West Midlands | South East | ||
South West | |||
Contracted rent by geographic region | |||
2%1% | 5 | ||
4% | |||
5% | 22% | ||
6% | |||
6% | |||
2 | |||
9% | 19% | 4 | |
13 | |||
11% |
15% | 19 |
10
Valuation by geographic region (including developments)
Wales
North East
Northern Ireland
East of England
5
1
3
Scotland
West Midlands
South West
East Midlands
North West
South East
Yorkshire & The Humber
0% | 5% | 10% | 15% | 20% | 25% |
9
4
Directors | Investment Manager | Advisers | |
Malcolm Naish (Chairman) | Target Fund Managers Ltd. | Administrator | Target Fund Managers Ltd. |
Professor June Andrews OBE | Kenneth MacKenzie, | Depositary | IQ EQ Depositary Company (UK) Ltd. |
Gordon Coull | Gordon Bland | Broker | Stifel Nicolaus Europe Ltd. |
Thomas Hutchison III | +44 (0) 1786 845 912 | Legal | Dickson Minto W.S. |
Alison Fyfe | targetfundmanagers.com | Auditors | Ernst & Young LLP |
This Report is intended solely for the information of the person to whom it is provided by the Group, the Investment Manager or the Administrator. This Report is not intended as an offer or solicitation for the purchase of shares in the Group and should not be relied on by any person for the purpose of accounting, legal or tax advice or for making an investment decision. The payment of dividends and the repayment of capital are not guaranteed by the Group. Any forecast, projection or target is indicative only and is not guaranteed in any way, and any opinions expressed in this Report are not statements of fact and are subject to change, and neither the Group nor the Investment Manager is under any obligation to update such opinions. Past performance is not a reliable indicator of future performance, and investors may not get back the original amount invested. Unless otherwise stated, the sources for all information contained in this report are the Investment Manager and the Administrator. Information contained in this Report is believed to be accurate at the date of publication, but none of the Group, the Investment Manager and the Administrator gives any representation or warranty as to the Report's accuracy or completeness. This Report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. None of the Group, the Investment Manager and the Administrator accepts any liability whatsoever for any loss (whether direct or indirect) arising from any use of this Report or its contents. Target Healthcare REIT plc, registered in the UK (Registered Number: 11990238). Registered Office: Level 13, Broadgate Tower, 20 Primrose Street, London, EC2A 2EW.
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Target Healthcare REIT plc published this content on 29 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2021 16:29:06 UTC.