Target Healthcare REIT : Quarterly Investor Report - August 2023

Recent news

Asset Management and I vestment Activity

reported by our tenants, and is demonstrated by growing

This quarter the conversion to 51 full ensuite wet-rooms from

Demand for places in our care homes remains encouraging, as

weekly fee rates and improving rent covers/profitability.

poorer quality ensuites at two care homes was completed,

Resident occupancy across the portfolio continues to recover

progressing plans to move the portfolio to 100% wet-rooms

towards pre-pandemic levels.

(currently 98% following these works). The Group signed

The Group's focus remains on managing the portfolio,

legal agreements relating to the addition of 18 bedrooms at a

supporting its tenants in their business aspirations and

property with works expected to complete by September

continuing to invest to improve the real estate when we see

2023.

the opportunity to unlock further value.

Post quarter-end, the Group acquired a site subject to a

The return to near-full rent collection for the quarter and the

forward funding agreement to construct a 66-bed care home

in Weston-super-Mare, which is pre-let to a new tenant to the

stability of the Group's portfolio valuation is consistent with

Group. The care home is to be built to exceptional ESG

its investment thesis - that modern, purpose-built care homes

standards, with the highest certifications anticipated, and will

will provide compelling long-term returns.

offer carbon net zero operational ability.

The portfolio value increased by 1.5% over the quarter,

comprising a like-for-like uplift in the operational portfolio

In addition to the above acquisition, we have four further sites

Performance

Outlook

(+0.9%), primarily reflecting inflation-linked rent reviews,

where pre-let care homes are being built which will deliver a

and further investment into the portfolio, mainly associated

pipeline of much-neededfit-for-purpose modern real estate

with the four development properties (+0.6%).

to the sector. The portfolio has 94% A or B EPC (100% A to C

ratings), currently compliant with the minimum energy

Contractual rent increased by 1.1%, largely as a

result of

efficiency standards anticipated to apply from 2030.

inflation-linked rent reviews in the quarter (+1.0%).

Summary balance sheet

£m

June-23

March-23

868.7

Property portfolio*

855.7

Cash

15.4

26.4

Net current assets/(liabilities)

(6.2)

(10.5)

Bank loans

(230.0)

(230.0)

Net assets

647.9

641.6

EPRA NTA per share (pence)

104.5

103.4

* Ignores the effect of fixed/guaranteed rent reviews. See note 9 to the Annual Report 2022 for full de

tails.

205

195

NAV total return

185

175

Share price total return

165

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135

125

115

105

95

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