Target Healthcare REIT

Investment summary

Target’s portfolio of high-quality purpose-built care homes continued to grow and perform well in the three months ended 30 June (Q419) with RPI-driven rental growth, increased property valuations, continuing acquisitions of operational homes and progress with pre-let forward-funded developments. EPRA NAV per share was 107.8p at 30 June 2019 (Q419), an increase of c 0.5% in the quarter and 2.0% in the year. Including dividends paid, the quarterly EPRA NAV total return was 2.1% or 8.2% for the year. Aggregate quarterly DPS for the year increased 2% to 6.58p. Acquisition activity in Q419 was slower than we assumed but £18.6m has since been committed to two high quality operational homes with full en-suite wet room facilities. The pipeline remains strong with debt funding available, while the share placing programme approved by the EGM along with the new corporate structure provides additional funding flexibility. We continue to forecast DPS growth in FY20, fully covered by earnings.