Target Healthcare REIT’s care home assets increased in value by 0.6% to £141.3m in the first quarter of 2015.
The group owns 28 care homes, the value of which is based on the external valuation of the REIT’s property portfolio by Colliers International.
This reflects an element of yield compression across individual assets as the underlying trading performance of the homes matures, together with uplifts from rent reviews on eight properties.
These rent reviews provided a 2% increase per property, and a like-for-like increase to portfolio passing rent of 0.6%.
As at 31 March, the portfolio had a net initial yield of 7.1% and an annualised rent roll of £10.5m, with the weighted average unexpired lease term of 29.7 years.
In January 2015, Target acquired a purpose-built care home in Swaffham, Norfolk, for about £4.4m. The care home is let to Norfolk Care Homes on a full repairing and insuring lease with annual RPI uplifts and a term expiring in 2038.
The regional mid-market remains subdued relative to the activity of 2014. Target has identified a number of attractive investment opportunities and expects to utilise the proceeds of the recent share issue over the coming months.
Kenneth MacKenzie, managing partner of Target Advisers LLP, said: “We are pleased with the group’s performance during the quarter. The existing portfolio has delivered strong rental returns allied with further capital growth as the portfolio matures and upwards-only rent reviews are reflected in valuations.”
amber.rolt@estatesgazette.com
