Net Asset Value, Corporate Update & Dividend

Target Healthcare REIT PLC

05 August 2026

 

5 August 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 30 June 2026, an update on corporate activity and its fourth interim dividend for the year ended 30 June 2026.

Corporate activity highlights

Fourteenth consecutive quarter of EPRA NTA growth driven by contractual, inflation-linked rental increases underpinned by high-quality, modern care home real estate.

·    EPRA Net Tangible Assets ('NTA') per share increased by 1.2% to 122.1 pence (31 March 2026: 120.6 pence), reflecting mainly a like-for-like valuation uplift of 1.1% driven primarily by inflation-linked rent reviews

·      Total accounting return of 2.5% for the quarter (based on EPRA NTA and including dividend payment)

·     EPRA "topped-up" net initial yield of 6.21% (31 March 2026: 6.23%) based on an annualised contractual rent of £61.1 million (31 March 2026: £60.1 million)

·     Adjusted EPRA EPS for the quarter of 1.55 pence per share (31 March 2026: 1.60 pence) which included one-off costs of 0.08 pence per share to reorganise the Group's security structure and improve the efficiency of its long-term debt facilities

·      Fully covered quarterly dividend of 1.508 pence per share (31 March 2026: 1.508 pence)

·     Net LTV of 16.1% as at 30 June 2026 (31 March 2026: 15.2%), below the Group's target level of c.25%, with 85% of the proceeds of last year's portfolio sale now redeployed, inclusive of two investments during the period totalling £28 million. The Group has total capital available of c.£75 million, excluding the uncommitted accordion facility

·    Total debt facilities weighted average term of 5.1 years (31 March 2026: 5.4 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 in the remainder of the calendar year. The pipeline has an indicative blended net initial yield in excess of 6%

·      Quarterly rent collection of 100% in relation to the properties held at 30 June 2026, with the home that had previously given rise to rental arrears having been sold early in the quarter

Strong underlying performance from a prime care home real estate portfolio that is fully let to a diversified tenant base and in a sector that continues to experience an under-supply of fit-for-purpose homes.

·     Diversified portfolio of 86 operational care homes and one forward funded development site (let to 31 tenants) valued at £924.1 million (31 March 2026: £903.2 million)

·    Contracted rent increased by 1.1% on a like-for-like basis, primarily due to inflation-linked upwards-only annual rent reviews, with a further 0.6% added from net capital acquisitions

·      WAULT of 26.0 years (31 March 2026: 26.1 years)

·      High quality, modern and sustainable real estate portfolio:

o  100% of the portfolio rated EPC A or B, and therefore is compliant with the minimum energy efficiency standards anticipated to apply from 2031

o  Positive social impact from sector-leading real estate standards: 100% en suite wet-rooms; generous 49 sqm space per resident; sustainable rent of £214 per sqm

·      Average rent cover on mature homes remained high, at 1.9x for the March 2026 quarter (most recent quarter of tenant data) (1.9x for the December 2025 quarter)

Kenneth MacKenzie, CEO of Target Fund Managers, commented:

"Our strong, consistent performance, as evidenced by our continued EPRA NTA growth, is fully supported by the attractive sectoral demographics and an under-supply of modern, purpose-built care homes.

"The Group's return to 100% rent collection, on a portfolio that has seen no vacancies since launch, is a result of our highly engaged landlord model which delivered the sale, at holding value, of the one remaining property where the tenant had not been paying rent in full. The acquisition of one new home and the commitment to fund a development site has resulted in 85% of the proceeds from the October 2025 portfolio disposal now being re‑invested in modern, purpose-built care homes. Our current attractive pipeline leaves us confident that the Group will be announcing further value-accretive acquisitions in the near future, which will increase leverage towards our target of c.25%.  

"We note the Prime Minister's recent social care plan speech and the commencement of public consultation by Baroness Casey of Blackstock on the need for social care reform. We would welcome new solutions to the issues in social care and it is sensible to bring forward the Casey report to 2027. We believe that responsible private operators and long-term investors will continue to play a key role in ensuring that everybody can access high‑quality care providing dignity and security in later life, benefitting residents and society.

"We are also announcing today that Alastair Murray, the Investment Manager's CFO, has decided to leave the business as a result of a change in his personal circumstances. Alastair remains a strong advocate for the Investment Manager and the Company and he leaves with our support and best wishes. The Investment Manager, in consultation with the Chair of the Audit Committee, has commenced a full market search to identify a suitable successor and a further announcement will be made in due course."

Portfolio performance

The portfolio value increased by 2.3% over the quarter, including 1.1% on a like-for-like basis, with the movement comprising of:

·      0.9% like-for-like increase from inflation-linked rent reviews;

·      0.2% like-for-like increase resulting from an additional one-off EBITDARM-linked rent review at a single home;

·      1.6% increase due to the acquisition of a standing asset and other capital expenditure; and

·      (0.4)% decrease from a property disposal.

Contractual rental income increased by 1.7% over the quarter, including 1.1% on a like-for-like basis, with the movement comprising of:

·      0.9% like-for-like increase from 22 inflation-linked upwards-only rent reviews with an average uplift of 3.2%;

·      0.2% like-for-like increase from an additional one-off EBITDARM-linked rent review;

·      1.3% increase due to the acquisition of a standing asset; and

·      (0.7)% decrease from a property disposal.

Portfolio update

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

·     The Group completed the acquisition of an operating care home in a prime Central Scotland location for £13 million (including costs). The existing operator of the home will continue as the tenant, improving portfolio diversification by adding a new tenant operator to the Group. The property has implied rent cover of c.2.0x and adds an immediate £0.8 million per annum to the portfolio's passing rent, with annual inflation linked rental increases subject to a cap and collar;

·     The Group has acquired a development site in Suffolk following the receipt of the required planning consent for the construction of a fully electric (with no fossil fuel use) 66-bed care home with 100% en suite wet-room provision. The property will also include on-site renewable energy generation and has a targeted EPC rating of 'A' and BREEAM-In-Use rating of 'Excellent'. Consistent with the Group's standard approach, the home is pre-let for a 35-year term to an existing tenant of the Group. The development cost is capped at £15 million (including the land acquisition), providing a net initial yield of c.6.0% based on actual costs;

·     As previously disclosed, the Group disposed of the home at which the tenant had not been paying rent for its holding value of £3.3 million; and

·     At a single home, a one-off performance related rent review was triggered. This related to a previously re‑tenanted home where it was agreed that the rent would increase should the home's operational performance support an increased yet still sustainable rental level. This one-off increase resulted in a 24% improvement in the passing rent at the home and added 0.2% to both the capital value and the level of annual rental income of the Group's portfolio as a whole.

Including the acquisition and forward fund in the quarter, as detailed above, the Group has redeployed a total of approximately £73 million at a weighted net initial yield in excess of 6%, representing 85% of the proceeds received from the Group's significant portfolio disposal in October 2025 at an implied net initial yield of 5.24%.

Debt facilities

As at 30 June 2026, the Group had committed debt facilities of £280 million, of which £200 million was drawn, representing a net LTV of 16.1% (31 March 2026: 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 30 June 2026 consisted of:

·     £150 million of drawn Fixed Rate Loans with a weighted average term of 7.6 years and a weighted average interest rate of 3.18%;

·    £50 million of drawn Term Loan bank facilities with a remaining term of 2.2 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 2.2 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%. The RCF was undrawn at 30 June 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 fourth interim dividend

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

Interim Property Income Distribution (PID):    1.410 pence per share

Interim ordinary dividend:                                0.098 pence per share

Ex-Dividend Date:	13 August 2026
Record Date:	14 August 2026
Payment Date:	28 August 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
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 30 June 2026 comprised 87 assets let to 31 tenants with a total value of £924.1 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 April 2026 to 30 June 2026:

	Pence per share
EPRA NTA per share as at 31 March 2026	120.6
Revaluation gains / (losses) on investment properties	1.6
Net impact of acquisition costs	(0.1)
Movement in revenue reserve	1.5
Third interim dividend payment for the year ending 30 June 2026	(1.5)
EPRA NTA per share as at 30 June 2026	122.1
Percentage change in the quarter	1.2%

At 30 June 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 122.2 pence per share.

2.     Summary balance sheet (unaudited)
	June-26	Mar-26	Dec-25	Sept-25
	£m	£m	£m	£m
Property portfolio*	924.1	903.2	894.6	948.3
Cash	50.9	66.1	67.2	44.4
Net current assets / (liabilities)*	(17.4)	(17.7)	(17.6)	(15.2)
Loans	(200.0)	(203.5)	(203.5)	(247.6)
Net assets	757.6	748.1	740.7	729.9
EPRA NTA per share (pence)	122.1	120.6	119.4	117.7

*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 30 June 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:

	30 June 2026	30 September 2026	31 December 2026	31 March 2027
EPRA "topped-up" NIY	6.21%	6.21%	6.21%	6.21%
EPRA NIY	6.16%	6.16%	6.16%	6.21%
Contractual rent (£m)	61.1	61.1	61.1	61.1
Passing rent (£m)	60.6	60.6	60.6	61.1

 

END