Target Healthcare REIT has postponed its acquisition of two care homes due to the COVID-19 pandemic.
In a first quarter update, the REIT said the lockdown had brought transactions that were at an early stage to a virtual halt, although a small number had completed at pricing levels agreed before 23 March.
Target said the construction of two new care homes had continued during the quarter but their completion may be delayed due to the pandemic.
Kenneth MacKenzie, CEO of Target Fund Managers, (pictured) said: “These are unprecedented times. With each day bringing a unique set of challenges, our priority continues to be ensuring where possible that we are supporting our tenants, their employees and the residents living in our care homes. At the same time, we are acutely aware of our responsibility to our shareholders and protecting the long-term interests of the company. The whole team has seamlessly moved to a remote working set-up and are working tirelessly in the interests of our shareholders and wider stakeholders.
“Given the fast-moving nature of the COVID-19 pandemic, it is impossible to predict with any certainty what sort of impact we may see across our portfolio. Whilst we expect to see a small number of care homes disproportionately affected, our investment strategy has always focused on the quality and design facilities of the properties, underpinned by a forensic approach to understanding local market dynamics. Nothing has changed our conviction that this approach, coupled with the underlying demographic trends supporting strong demand for care home beds, will underpin the delivery of reliable and sustainable income over the long term.
“Over the seven years since the company’s launch we have remained steadfast in our commitment to building a highly diversified portfolio of care homes by geography, tenant and end-user profile and are confident that its defensive characteristics will serve us well during this period. At the same time, we have been consistent with our highly disciplined and prudent approach to financing, which has been further enhanced by January’s new facility, securing further long-term, fixed-rate debt funding to complement the existing flexible facilities and ensuring we are robustly positioned to navigate any short-term volatility.”