Target Healthcare REIT has reported another strong quarter, underpinned by organic rental growth, strong rent collection and arrears recovery. Around half of recent sales proceeds have been deployed, but significant available capital remains, more than matched by a strong pipeline of similarly attractive opportunities. Our unchanged forecasts point to acquisitions, in combination with indexed rent reviews, driving continuing earnings and DPS growth.

Target Healthcare REIT has acquired three operational care homes and one new development for a total of £45m, deploying more than half the proceeds of its recent nine-home portfolio disposal. The high-quality homes, let to a strong new but established tenant, have been acquired at an accretive blended net initial yield of more than 6%. With significant remaining available capital, and a strong pipeline of similarly attractive opportunities, we expect acquisitions, in combination with indexed rent reviews, to drive continuing earnings and DPS growth.