Target Healthcare REIT PLC Tenant update (3242N)
23 September 2019 - 10:43PM
UK Regulatory
TIDMTHRL
RNS Number : 3242N
Target Healthcare REIT PLC
23 September 2019
23 September 2019
TARGET HEALTHCARE REIT PLC
("Target" or the "Company", together with its subsidiaries, the
"Group")
Tenant Update
The Company announces that it has received notice from one of
its tenants, Orchard Care Homes ("Orchard"), which operates six
homes in the Target portfolio, of its intention to exit these six
leasehold homes as part of a wider business restructuring. The
Company is continually preparing for such contingencies and is in
active discussions with alternative care home operators to ensure
an orderly handover of operations with minimal disruption to the
residents. The Company expects to continue to receive rental income
from the six assets up until the end of the year and has a further
four months of rental deposits held in reserve.
The Company has a diversified portfolio and currently benefits
from 26 different tenants across its 63 homes. The Company also has
a successful track record of replacing operators with no disruption
to the residents and a minimal value impact. Whilst the homes
operated by Orchard have recently had on average poorer rent
covers, the level of earnings before interest, tax, depreciation,
amortisation and management charges over the last year has still
exceeded the equivalent rental obligation.
Following the re-tenanting, the Company expects to see
management and rent covers improve at these assets. The six assets
were already conservatively valued at an average net initial yield
of 7.15 per cent., as at 30 June 2019, reflecting a significant
discount to the portfolio average net initial yield of 6.26 per
cent. Having spoken to its independent valuer, the Company does not
believe this event will have a material impact on the value of the
homes.
The Company's legal entity identifier: 213800RXPY9WULUSBC04
All enquiries:
Target Fund Managers Limited (Investment Manager to the
Company)
+44 1786 845
Kenneth MacKenzie 912
+44 1786 845
Gordon Bland 920
Stifel Nicolaus Europe
Limited
+44 20 7710
Mark Young mark.young@stifel.com 7600
+44 20 7710
Neil Winward neil.winward@stifel.com 7600
+44 20 7710
Tom Yeadon tom.yeadon@stifel.com 7600
FTI Consulting
+44 20 3727
Dido Laurimore TargetHealthcare@fticonsulting.com 1000
Claire Turvey
Richard Gotla
Notes to Editors
UK listed Target Healthcare REIT plc (THRL) is an externally
managed Real Estate Investment Trust which aims to provide
shareholders with an attractive level of income, together with the
potential for capital and income growth, through the assembly and
management of a portfolio of modern, purpose-built care homes.
The Group's portfolio at 30 June 2019 comprised 63 assets,
including three under development, with a total portfolio value of
GBP500.9 million. In Q3 2019 the Group has completed the disposal
of two properties and separately the acquisition of two properties.
On completion of the developments the Group will have 26 different
tenants.
The Group only invests in modern, purpose-built homes that
provide the best environments for residents and their care
providers and ensure they are let at a sustainable rent. The Group
aims to build 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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