Net Asset Value, Corporate Update & Dividend

Target Healthcare REIT PLC

06 May 2026

 

6 May 2026

Target Healthcare REIT plc and its subsidiaries

("Target Healthcare" or "the Company" or,

together with its subsidiaries, "the Group")

Net Asset Value, update on corporate activity and dividend declaration

Target Healthcare (LSE: THRL), the UK listed specialist investor in modern, purpose-built care homes, announces its unaudited quarterly Net Asset Value ('NAV') as at 31 March 2026, an update on corporate activity and its third interim dividend for the year ending 30 June 2026.

Corporate activity highlights

Continued EPRA NTA and earnings growth driven by contractual, inflation-linked, annual rent increases and value-enhancing asset management activities.

·    EPRA Net Tangible Assets ('NTA') per share increased 1.0% to 120.6 pence (31 December 2025: 119.4 pence), reflecting mainly a like-for-like valuation uplift of 0.8% driven primarily by inflation-linked rent reviews

·     Total accounting return of 2.3% for the quarter (based on EPRA NTA and including dividend payment)

·    EPRA "topped-up" net initial yield of 6.23% (31 December 2025: 6.23%) based on an annualised contractual rent of £60.1 million (31 December 2025: £59.5 million)

·     Adjusted EPRA EPS for the quarter of 1.60 pence per share (31 December 2025: 1.58 pence, excluding the non-recurring contribution from historical rent arrears recovered during the December 2025 quarter)

·      Fully covered quarterly dividend of 1.508 pence per share

·     Net LTV of 15.2% as at 31 March 2026 (31 December 2025: 15.2%), below the Group's target level of c.25% as it continues to redeploy the disposal proceeds from the previous quarter. The Group has total capital available of c.£100 million, excluding the uncommitted accordion facility

·     Total debt facilities weighted average term of 5.4 years (31 December 2025: 5.6 years). Interest costs are fixed on £200 million of debt until at least September 2030, at a weighted average cost of 3.89% (inclusive of amortisation of arrangement costs)

·    The Investment Manager continues to build an attractive pipeline, in excess of the capital available, of high-quality investment opportunities, with further acquisitions expected to be committed prior to the June 2026 year end. The pipeline has an indicative blended net initial yield in excess of 6%

·    Rent collection of 99% for the quarter. Subsequent to the quarter end, the Group sold at carrying value the property which had been responsible for the uncollected rent in the quarter

Continued strong operational performance, with targeted capex enhancing the ESG credentials of a sector leading portfolio.

·    Diversified portfolio of 86 operational care homes (let to 31 tenants) valued at £903.2 million (31 December 2025: £894.6 million)

·    Contracted rent increased by 0.9% on a like-for-like basis, primarily due to inflation-linked upwards-only annual rent reviews, with a further increase of 0.1% due to the rentalisation of capital expenditure across the existing portfolio

·      WAULT of 26.1 years (31 December 2025: 26.3 years)

·      High quality, modern and sustainable real estate portfolio:

o  100% of the portfolio rated EPC A or B, and therefore the portfolio is compliant with the minimum energy efficiency standards anticipated to apply from 2030

o  Positive social impact from sector-leading real estate standards: 100% en suite wet-rooms; generous 48 sqm space per resident; sustainable rent of £211 per sqm

·     Average rent cover on mature homes remained high, at 1.9x for the December 2025 quarter (most recent quarter of tenant data) (2.0x for the September 2025 quarter)

Kenneth MacKenzie, CEO of Target Fund Managers, commented:

"We continue to curate a best-in-class portfolio through value-enhancing asset management and capital redeployment activities.

"We re-tenanted one home to an existing tenant delivering a valuation uplift, from a combination of increased rent and yield shift, more than offsetting the rental incentive provided. Our continued investment in PV panels, with the corresponding increase in rents that this generates, is now supported by a full year's collection of energy usage data demonstrating this to be an attractive investment for landlord and tenant alike. In addition, we are investing in an extension at one home, to increase the number of beds by four to 72, fully rentalising the expenditure.

"I am also pleased to note that, subsequent to the quarter end, we disposed of one home which was responsible for the rent arrears in the current quarter and would expect the portfolio to return to full rent collection in the quarter to 30 June 2026.

"We remain focused on executing on our pipeline of opportunities as we look to re-deploy the remaining c.£40m of disposal proceeds from the sub portfolio sale late last October. We have agreed terms and are in legals for purchases at a value in excess of those disposal proceeds and expect these disposal proceeds to have been materially committed by the end of the Company's financial year."

Portfolio performance

The portfolio value increased by 1.0% over the quarter with the movement comprised of a:

·      0.8% like-for-like increase from inflation-linked rent reviews;

·      0.1% like-for-like increase from the re-tenanting of a property,

·      (0.1)% like-for-like decrease from a marginal softening in the portfolio's net initial yield; and

·      0.2% increase due to capital expenditure.

Contractual rental income increased by 1.0% over the quarter with the movement comprised of a:

·      0.8% like-for-like increase from 21 inflation-linked upwards-only rent reviews with an average uplift of 3.7%;

·      0.1% like-for-like increase due to re-tenanting activities; and

·      0.1% increase due to the rentalisation of capital expenditure.

Portfolio update

During the quarter, the following investment and asset management initiatives were undertaken:

·      The successful re-tenanting of one asset, representing 0.9% of the total rent roll, to an existing tenant of the Group. A rent free period of 12 months was granted in exchange for an increase in the contractual rent of more than 6%, an extension of the remaining lease term by c.14 years to 35 years and the inclusion of additional green lease clauses. A capital expenditure facility of £1.6 million was granted to the tenant in order to fund further improvements to the real estate which, if utilised, would be rentalised at a similar investment yield;

·    The Group rentalised capital expenditure of c.£1.2 million, across seven properties, in relation to recent real estate improvements, such as the installation of photovoltaic (PV) panels. The blended investment yield resulting from this capital expenditure was in excess of the portfolio net initial yield of 6.2%.

Debt facilities

As at 31 March 2026, the Group had committed debt facilities of £280 million, of which £203.5 million was drawn, representing a net LTV of 15.2% (31 December 2025: 15.2%). Given the current pipeline and capital available, the Group expects to increase the LTV to around 25% through further investment in modern, purpose-built assets.

The Group's debt facilities at 31 March 2026 consisted of:

·     £150 million of drawn Fixed Rate Loans with a weighted average term of 7.9 years and a weighted average interest rate of 3.18%;

·    £50 million of drawn Term Loan bank facilities with a remaining term of 2.5 years, with the option of two one-year extensions thereafter subject to lender consent, and a weighted average interest rate of 5.30% that has been fixed through the use of interest rate swaps until September 2030; and

·    £80 million of revolving credit facilities ("RCF") with a remaining term of 2.5 years, with the option of two one-year extensions thereafter subject to lender consent, which carry a variable interest rate of SONIA plus a margin of 1.50%. £3.5 million of the RCF was drawn at 31 March 2026.

All interest rates quoted above are exclusive of the amortisation of arrangement fees.  

A balance sheet summary and an analysis of the movement in the EPRA NTA over the quarter is shown in the Appendix of this announcement.

Announcement of third interim dividend

The Company today declares its third interim dividend for the year ending 30 June 2026, in respect of the period from 1 January 2026 to 31 March 2026, of 1.508 pence per share as detailed in the schedule below:

Interim Property Income Distribution (PID):    1.508 pence per share

Interim ordinary dividend:                                  nil

Ex-Dividend Date:	14 May 2026
Record Date:	15 May 2026
Payment Date:	29 May 2026

Shareholders entitled to elect to receive distributions without deduction for withholding tax may complete the declaration form which is available on request from the Company through the contact details provided on its website www.targethealthcarereit.co.uk, or from the Company's registrar. Shareholders who qualify for gross payments are, principally, UK resident companies, certain UK public bodies, UK charities, UK pension schemes and the managers of ISAs, PEPs and Child Trust Funds, in each case subject to certain conditions. Individuals and non-UK residents do not qualify for gross payments of distributions and should not complete the declaration form.

LEI: 213800RXPY9WULUSBC04

ENDS

Enquiries:

Target Fund Managers Limited	Tel: [phone]
Kenneth MacKenzie James MacKenzie
Alastair Murray
Stifel Nicolaus Europe Limited	Tel: [phone]
Mark Young
Rajpal Padam
Catriona Neville
Panmure Liberum Limited	Tel: [phone]
Jamie Richards
David Watkins
FTI Consulting	Tel: [phone]
Dido Laurimore	[e-mail]
Richard Gotla

Notes to editors:

UK listed Target Healthcare REIT plc (THRL) is an externally managed FTSE 250 Real Estate Investment Trust which provides shareholders with an attractive level of income, together with the potential for capital and income growth, from investing in a diversified portfolio of modern, purpose-built care homes.

The Group's portfolio at 31 March 2026 comprised 86 assets let to 31 tenants with a total value of £903.2 million.

The Group invests in modern, purpose-built care homes that are let to high quality tenants who demonstrate strong operational capabilities and a strong care ethos. The Group builds collaborative, supportive relationships with each of its tenants as it believes working in this way helps raise standards of care and helps its tenants build sustainable businesses. In turn, that helps the Group deliver stable returns to its investors.

Important information

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the Market Abuse Regulations (EU) No. 596/2014, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

APPENDIX

1.     Analysis of movement in EPRA NTA

The following table provides an analysis of the movement in the unaudited EPRA NTA per share for the period from 1 January 2026 to 31 March 2026:

	Pence per share
EPRA NTA per share as at 31 December 2025	119.4
Revaluation gains / (losses) on investment properties	1.1
Movement in revenue reserve	1.6
Second interim dividend payment for the year ending 30 June 2026	(1.5)
EPRA NTA per share as at 31 March 2026	120.6
Percentage change in the quarter	1.0%

At 31 March 2026, including the valuation ascribed to the Group's interest rate derivative contracts used to hedge its exposure to variable interest rates, which are excluded from the calculation of the EPRA NTA, the unaudited NAV calculated under International Financial Reporting Standards was 120.7 pence per share.

2.     Summary balance sheet (unaudited)
	Mar-26	Dec-25	Sept-25	Jun-25
	£m	£m	£m	£m
Property portfolio*	903.2	894.6	948.3	929.9
Cash	66.1	67.2	44.4	39.7
Net current assets / (liabilities)*	(17.7)	(17.6)	(15.2)	(15.7)
Loans	(203.5)	(203.5)	(247.6)	(242.0)
Net assets	748.1	740.7	729.9	711.9
EPRA NTA per share (pence)	120.6	119.4	117.7	114.8

*Properties within the portfolio are stated at the market value provided by the external valuer and the IFRS effects of fixed/guaranteed minimum rent reviews are not reflected.

3.     External Valuer

The valuation of the property portfolio as at 31 March 2026 was conducted by CBRE Limited.

4.     EPRA NIY profiles and unwind of rent-free period

The Group currently has one asset with a rent-free period. As this unwinds, assuming no other changes including inter alia the portfolio valuation or rental profile, the EPRA yield profiles for the portfolio will be as follows:

	31 March 2026	30 June 2026	30 September 2026	31 December 2026	31 March 2027
EPRA "topped-up" NIY	6.23%	6.23%	6.23%	6.23%	6.23%
EPRA NIY	6.18%	6.18%	6.18%	6.18%	6.23%
Contractual rent (£m)	60.1	60.1	60.1	60.1	60.1
Passing rent (£m)	59.6	59.6	59.6	59.6	60.1

 

END