Care REIT’s expansion is being held back by high interest rates and discounts to net asset value, meaning it cannot raise more capital to grow the business, it said in its annual results statement.
The REIT reported an NAV per share of 119.33p as at the end of 2024, up from 115.38p in 2023. Stock was trading at 108.6p per share on the day of the results.
The REIT’s pretax profit dropped to £45m from £48.8m year-on-year.
Simon Laffin, chair at Care REIT, said: “We believe we could profitably invest more capital, both to acquire more care homes and to invest in enhancing our existing portfolio, but we remain constrained by high interest rates and the high discounts to net asset value that affect the UK REIT sector generally. This means we cannot raise more capital to grow the business and achieve our potential.”
In 2024, the REIT saw property investments tick up by 4.3% to £679m. Contracted annual rent roll grew by 5.3% to £51.4m, with rent reviews in the year adding £1.7m to the total figure. Underlying resident occupancy at the end of December 2024 stood at 89.1% versus 88.2% the year before.
Laffin said: “We own quality care homes with good operators and play an ever more important role in the health infrastructure of the UK. The country needs more care homes to cope with an ageing population and to relieve stress on the NHS that struggles to discharge elderly patients with continuing care needs.
“The board believes that our model of inflation-based rent reviews, with high rental cover, in a market where supply is very constrained and demand rising, continues to offer the basis for profitable growth.”
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