Target Healthcare REIT endured a 4.8% fall in the market value of its portfolio driven by a like-for-like valuation movement of -5.5% and net acquisitions of 0.7% for the six-month period ending 31 December 2022.
The REIT said the like-for-like valuation movement consisted of a decrease of 7.3% which was offset by a 1.8% increase from inflation-linked rental uplifts.
Target’s EPRA NTA per share decreased by 8.3% to 103.0p in the reporting period and its NAV total return was -5.4% (2021: 3.4%). It maintained its divided per share at 3.38p.
Alison Fyfe, chair of the company, said: “We remain committed to our primary investment objective, producing long-term stable income and attractive total returns, with positive social impact by investing in fit-for-purpose care homes for older people in society. There is an increased national focus on supporting people in the community rather than having them experience unnecessary and potentially distressing hospital admission and care homes play a crucial role in this.
“The recent increases in interest rates have impacted on earnings but our tenants’ underlying trading performance is improving and maturing, with this property sector benefitting from significant tailwinds of demographic change and needs-based demand for care. With a rebased dividend to reflect the group’s current recurring earnings, we believe the group’s modern portfolio is well positioned to deliver sustainable long-term returns to shareholders.”
Target Healthcare also announced the disposal of four care homes in Northern Ireland for an undisclosed price. It said the disposal price was ahead of carrying value at both 30 June 2022 and 31 December last year and results in an annualised IRR in excess of 10% over the period of ownership.
Scott Steven, head of asset management at Target Fund Managers, said: “These care homes have been a successful investment for the group, delivering strong returns. The disposal is part of our commitment to pro‐actively manage the portfolio and provide an attractive and sustainable level of income, together with the potential for growth, from a diversified portfolio of modern, purpose built care homes.”
