Target Healthcare REIT posted a “strong operational performance underpinned by continued institutional investor and end-user demand”, for the financial year ended 30 June 2023.
The listed specialist investor in modern, purpose-built UK care homes said contractual rent had increased by 2% to £56.6m per annum compared with £55.5m last year, including a like-for-like increase of 3.8%, predominantly driven by rent reviews.
However, the REIT reported a decrease in the valuation of its portfolio of £42.9m (4.7%) to £868.7m, including a like-for-like valuation decrease of 4.1%.
Its dividend decreased by 8.6% to 6.18p for the full year, following a reduction in Q1 2023, but the REIT said it intended to increase the quarterly dividend in respect of the year ending 30 June 2024 by 2% to 1.428p per share.
Alison Fyfe, chair of Target Healthcare REIT, said: “The board remains confident in the group’s prospects. Our portfolio consists of premium quality assets in a critical real estate investment class with compelling sector tailwinds.
“Our portfolio is performing strongly, benefitting from our initiatives to dispose of non-core assets, from further capex to refresh or enhance our real estate, from our active engagement with tenants, and from the more favourable trading environment. Our vacancy rate remains at nil with rent collection, rent cover and underlying resident occupancy all improving. Asset valuations remain stable, and our financing costs are well-protected from higher interest rates.
“This improvement in portfolio performance, when combined with our effective management of interest rate exposure, gives us confidence in the group’s earnings outlook, allowing us to increase our dividend in line with rental growth.”
