Target Healthcare REIT posts drop in total return

Target Healthcare Managing Partner Kenneth MacKenzie

Specialist UK care home investor Target Healthcare REIT posted a 7.8% total net asset value return in the year ended 30 June 2017, down from 9.3% in the prior year.

Unaudited EPRA NAV per share was 101.9p (up from 100.6p) with portfolio value rising by a third to £282m from £210m in the previous year.

Target Chairman Malcolm Naish said: “Target Healthcare REIT has continued to assemble a portfolio of UK care homes capable of delivering stable rental returns through diversification by tenant, location, service and resident-choice.

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“We retain a conviction that placing long-term investment capital in purpose-built properties which offer suitably modern and well-equipped environments for residents and their carers, is the right thing to do.”

Target continued to grow and diversify its portfolio with the acquisition of eight assets and three tenants during the year.

The South East (16.4%) and Ideal Carehomes (16.9%) accounted for the greatest share of geographical and tenant assets, respectively.

Target said its increasingly diversified portfolio, including nursing and residential care combined with a mix of private and publicly funded residents, would lead to property specific challenges.

It said local staffing difficulties had forced the re-registration of one home from nursing to residential care during the year, while it had also changed a home tenant following disappointing regulatory and quality reviews.

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