Target Healthcare REIT (THRL)

Business description

Target Healthcare REIT invests in modern, purpose-built residential care homes in the UK let on long leases to high-quality care providers. It selects assets according to local demographics and intends to pay increasing dividends underpinned by structural growth in demand for care.

Investment summary

Target has provided a NAV and portfolio update as at 30 June. The previously announced acquisition of a newly-built home in Leicestershire and the forward funding of one in Merseyside bring the portfolio to a total of 47 properties and closer to management’s target of a 20% loan-to-value (LTV) ratio (14.2% at 30 June). We have adjusted our estimates for the NAV update and to account for the timing of the new investments. Target has the longest lease portfolio of any UK REIT, producing stable income streams from high-quality and purpose-built modern care homes. These support a prospective dividend yield of 5.2%.

Last updated on 01/08/2017

Y/E Jun Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2015A 12.7 N/A 9.6 6.10 20.2 19.5
2016A 16.3 N/A 11.7 5.06 24.3 26.2
2017E 21.3 N/A 15.4 5.10 24.1 17.1
2018E 26.5 N/A 20.2 6.79 18.1 14.9

Last updated on 01/08/2017

Latest research

Nearing full investment

Update | Property | 01/08/2017

Portfolio growth

Update | Property | 28/04/2017

Care home specialist

Initiation | Property | 20/03/2017

Latest video

Executive interview - Target Healthcare REIT

Industry outlook

The UK population over the age of 85 is expected to increase by 140% from 2014 to 2039. There is a lack of high-quality care homes of the sort Target invests in, providing ample opportunity to grow the portfolio.

Last updated on 03/07/2017

Key management

Gordon Bland, FD

Company address

Ordnance House
31 Pier Road
St Helier
Jersey
JE4 8PW
United Kingdom
+44 (0)1786 845 912
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