Quarterly Investor Report:

May 2023

Quarter ended 31 March 2023

Target Healthcare REIT plc and its subsidiaries ('the Group') is a leading investor in modern purpose-built UK care homes with en suite wet rooms. The Group's objective is to provide investors with an attractive quarterly dividend, generated from a portfolio diversified by tenant, geography and end-user payment profile, through responsible investment.

Group at a glance

Properties

97

Beds

6,705*

Tenants

32

Contracted rent

£55.9m

Property Value

£855.7m

Overview

Key ratios & financials

Launch date

March 2013**

Investment properties

£855.7 million

ISIN

GB00BJGTLF51

Drawn debt

£230.0 million

SEDOL

BJGTLF5

EPRA NTA

£641.6 million

Company name

Target Healthcare REIT plc

EPRA NTA per share

103.4 pence

Registered number

Quarterly NAV total return

11990238

2.1%

(including dividend)

Expected quarterly dividend

Feb/May/Aug/Nov

Quarterly Group specific

1.52 pence

Financial year end

30 June

adjusted EPRA earnings per

share

Currency

Sterling

Quarterly dividend per share

1.40 pence

Website

www.targethealthcarereit.co.uk

Dividend yield (02/05/2023)

7.4%

Ordinary share class as at

02/05/2023

Loan-to-Value ('LTV')***

26.9% (gross); 23.8% (net)

Shares in issue

620,237,346

Management fee rate

1.05% up to £500m NAV

Share price

75.7 pence

0.95% of £500m - £750m NAV

0.85% of £750m - £1,000m NAV

Market capitalisation

£469.5 million

0.75% of £1,000m - £1,500m NAV

0.65% of £1,500m + NAV

Share price discount to EPRA

26.8%

WAULT

26.8 years

NTA

  • Including planned beds in development sites
  • Originally launched as Target Healthcare REIT Limited (Jersey registered: 112287)
  • Gross LTV calculated as total gross debt as a proportion of gross property value. Net LTV calculated as total gross debt less cash, as a proportion of gross property value

Recent news

Prime UK care homes as an investment asset class continuesto attract investor demand underpinned by home trading performance and demographic tailwinds.

The rent cover of our tenants, which is a key profitability metric, has improved to 1.5x for the most recent quarter we have data for. This compares well to pre-pandemic norms despite being achieved at lower levels of underlying resident occupancy,currently 84%.

Further tenant profitability growth is anticipated as occupancy continues to improve towards pre-pandemic levels, which will further support valuations. The real estate standards fundamental to the strategy enable THR's tenants to attract private-fee paying residents at fee levels where they canincrease staff pay and reinvest in their business.

Performance

The portfolio value decreased by 1.4% over the quarter, following the disposal of four Northern Irish properties (-2.4%),offset by a like-for-like uplift in the operational portfolio value (+0.5%) and further investment into the portfolio, mainly associated with the four development properties (+0.5%).

Contractual rent decreased by 2.0%, as result of the propertydisposals (-2.8%)which was offset by inflation-linkedrent reviews in the quarter (+0.8%).

Asset Management and Investment Activity

The sale of the Northern Irish properties sees the Group achieve full exit from that geography. The aggregate disposalprice represented 2.5% of the Group's overall portfolio value and is ahead of carrying value at both Jun-22(the Group's lastfinancial year-end) and Dec-22.

The Group also completed the acquisition of a development site near Malvern, Worcestershire, following the receipt of planning consent for the construction of a 60-bedcare home.The home is pre-let to an existing tenant and has a capped development agreement which is underpinned by a fixed priceconstruction contract.

The re-tenanting of one home completed, which will alleviate cashflow pressures for the outgoing tenant, allowing a return to a fully rent-paying position on its three remaining homes.

Contractual rent for the incoming tenant remains the same.

Outlook

Rebasing our dividend in line with current earnings was recognition of the higher interest rate environment limiting the Company's ability to grow earnings through acquisitions at this time, as investment yields have remained relatively low for the prime UK care homes it invests in. We retain a strong conviction that improving portfolio performance, strong demographic tailwinds and our embedded inflation-linked rental growth willdrive long-termsustainable returns.

Summary balance sheet

£m

Mar-23

Dec-22

Property portfolio*

855.7

867.7

Cash

26.4

21.8

Net current assets/(liabilities)

(10.5)

(10.4)

Bank loans

(230.0)

(240.0)

Net assets

641.6

639.1

EPRA NTA per share (pence)

103.4

103.0

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

Performance - NAV and share price total return

205

195

NAV total return

185

175

Share price total return

165

155

145

135

125

115

105

95

Jun-13

Sep-13

Dec-13Mar-14Jun-14Sep-14Dec-14

Mar-15Jun-15

Sep-15

Dec-15

Jun-16

Sep-16

Dec-16

Jun-17

Sep-17

Dec-17

Jun-18

Sep-18

Dec-18

Jun-19

Sep-19

Dec-19

Jun-20

Sep-20

Dec-20

Jun-21

Sep-21

Dec-21

Jun-22

Sep-22

Dec-22

Mar-13

Mar-16

Mar-17

Mar-18

Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Portfolio summary at 31 March 2023

Number of properties by geographic region

Scotland

North East

North West

Yorkshire & The Humber

Wales

East Midlands

West Midlands

East of England

South West

South East

Contracted rent by geographic region

2%1%

8

5%

7%

24%

7%

8%

2

12%

17%

18

17%

26

13

Valuation by geographic region

7

(including developments)

5

1

Wales

North East

13

East of England

4

South West

West Midlands

Scotland

East Midlands

North West

South East

Yorkshire & The Humber

0%

5%

10%

15%

20%

25%

Directors

Investment Manager

Advisers

Alison Fyfe (Chair)

Target Fund Managers Ltd.

Administrator

Target Fund Managers Ltd.

Michael Brodtman

Kenneth MacKenzie,

Depositary

IQ EQ Depositary Company (UK) Ltd.

Richard Cotton

Gordon Bland

Broker

Stifel Nicolaus Europe Ltd.

Vince Niblett

+44 (0) 1786 845 912

Legal

Dickson Minto W.S.

Dr Amanda Thompsell

targetfundmanagers.com

Auditors

Ernst & Young LLP

This Report is intended solely for the information of the person to whom it is provided by the Group, the Investment Manager or the Administrator. This Report is not intended as an offer or solicitation for the purchase of shares in the Group and should not be relied on by any person for the purpose of accounting, legal or tax advice or for making an investment decision. The payment of dividends and the repayment of capital are not guaranteed by the Group. Any forecast, projection or target is indicative only and is not guaranteed in any way, and any opinions expressed in this Report are not statements of fact and are subject to change, and neither the Group nor the Investment Manager is under any obligation to update such opinions. Past performance is not a reliable indicator of future performance, and investors may not get back the original amount invested. Unless otherwise stated, the sources for all information contained in this report are the Investment Manager and the Administrator. Information contained in this Report is believed to be accurate at the date of publication, but none of the Group, the Investment Manager and the Administrator gives any representation or warranty as to the Report's accuracy or completeness. This Report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. None of the Group, the Investment Manager and the Administrator accepts any liability whatsoever for any loss (whether direct or indirect) arising from any use of this Report or its contents. Target Healthcare REIT plc, registered in the UK (Registered Number: 11990238). Registered Office: Level 13, Broadgate Tower, 20 Primrose Street, London, EC2A 2EW.

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Disclaimer

Target Healthcare REIT plc published this content on 09 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2023 14:17:02 UTC.