Target Healthcare REIT

Overview
Price performance
Financials
Research
Thematics

Target Healthcare REIT invests in modern, purpose-built residential care homes in the UK let on long leases to high-quality care providers. It selects assets according to local demographics and intends to pay increasing dividends underpinned by structural growth in demand for care.

The care home sector is driven by demographics rather than the economy, generating a positive demand outlook for new, ESG-compliant, purpose-built homes with flexible layouts and high-quality residential facilities. With its unwavering focus on asset and tenant quality, these are the homes in which Target invests. It believes best-in-class assets, in areas with strong demand/supply characteristics, and sustainable rent levels will always be attractive to existing or alternative tenants and are key to providing sustainable, long-duration income with capital growth.

Latest Insights

Real Estate |
Update

06.02.24

Target Healthcare REIT — Rent cover at a high and fully covered DPS

Real Estate |
Outlook

07.11.23

Target Healthcare REIT — DPS growth from a sustainable base

Real Estate |
Update

09.08.23

Target Healthcare REIT — Fully covered DPS and positive total return

Real Estate |
Update

24.04.23

Target Healthcare REIT — Growth from a firm base

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Sector

Real Estate

Equity Analyst

Martyn King

Director, Financials

Key Management

Alison Fyfe

Chairman
Gordon Bland

FD
Kenneth MacKenzie

CEO

Balance Sheet

Forecast net debt (£m)

250

Forecast gearing ratio (%)

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	(3.5)	(8.2)	(1.2)
Relative	(5.1)	(12.7)	(1.0)
52 week high/low	88.0p/66.5p

Financials

Indexed rent reviews are driving increased earnings and property values. H2 income will also benefit from development completions. Tenant profitability continues to strengthen, reflected in a new high level of rent cover (1.9x) and 99% rent collection. H124 DPS of 2.856p, covered 1.07x by adjusted EPRA earnings. EPRA net tangible assets per share increased 2.0% to 106.7p and including dividends paid the accounting total return was 4.9%. Reflecting strong investor demand for high quality assets, the tight yield spread over funding costs is frustrating THRL’s ambitions to grow its portfolio, but a strong, liquid balance sheet positions it well for a change in market conditions.