Landlord considers options as talks continue on Four Seasons missed payments

Gordon Bland 05

Leading care home landlord, Target Healthcare REIT, has said it is considering re-tenanting and the sale of two homes leased to Four Seasons as talks continue over missed rental payments.

Publishing its annual financial results, the REIT said its adjusted earnings adjusted EPRA earnings per share had decreased to 5.27 pence in 2020 from 5.45 pence in 2019 due to a pause in investment activity during COVID-19 and “prudent provisioning in relation to rental income recognised from two tenants”.

Target finance director Gordon Bland (pictured) told CHP the REIT had taken further provisioning in its accounts for two maturing homes operated by another small provider.

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Gordon said Target was confident that it would recover the value of the Four Seasons homes going forward and should be receiving income from the other two maturing homes “going into next year”.

The finance director said the business had recommenced investing and had purchased an asset recently following a previous acquisition in July.

“We have another couple in the pipeline so we should get towards full investment of our capital and we should get to close to our dividend cover,” Gordon added.

“The whole portfolio has performed pretty well. We are collecting 95% of rent and our assets have increased or maintained their value.”

Target said the reduction in occupancy levels of its underlying tenant operators as a result of lockdown, which restricted viewings and new resident uptakes, was now being substantially matched by new enquiry levels.

Chief executive Kenneth Mackenzie said: “We are a very long income fund deeply committed to the sector and will continue buying really good quality real estate.”

Four Seasons announced it was withdrawing rent from 135 leasehold homes in October 2019 after going into administration in April.

The care home operator announced the hand over more than 100 homes to rival operators in December 2019 and March 2020 as part of the restructuring of its leasehold portfolio.

The care home provider declined to comment on its negotiations with Target.

Tags : FinanceFour SeasonsTarget Healthcare REIT

The author Lee Peart

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