Target Healthcare REIT has increased its portfolio value by 10.9% in the year ending 30 June 2021.
In its annual results, the REIT announced portfolio up by £67.2 million, or 10.9%, to £684.8 million, including like-for-like valuation growth of 3.8% (2020: 2.8%).
Speaking to CHP, Kenneth, CEO of Target Fund Managers, (pictured) said: “Like-to-like yield compression has increased value and we continued to build the size of the portfolio with a £70m investment in five new assets during the year.”
The REIT’s portfolio now consists of 77 properties, including 73 operational care homes and four pre-let sites.
Resident occupancy levels across the mature portfolio continued to recover from the low point in Q1 2021, with twelve-month rolling rent cover of 1.5 times at 30 June 2021.
Kenneth said: “Occupancy was definitely hit because of a lack of admissions. We have seen occupancy rise a per cent or two month since February. It went down to the low 70s and it is up now around 80%.”
The CEO forecast occupancy would return to pre-pandemic levels by summer 2022. Noting high enquiry levels, Kenneth said staffing would be the main challenge for providers going ahead.
The REIT collected 95% of rent with rental concessions requested by a limited number of tenants due to COVID pressures.
Kenneth said one of two Four Seasons care homes had been retenanted with the other expected to follow in the coming weeks.
Looking ahead, he highlighted interest rates and wage potential inflation as areas of concern.
“The sector is a good place to be if you have the right kind of real estate,” Kenneth said.
“Three quarters of the real estate is not fit for purpose. That’s the big untold story that nobody writes about.”