Target Healthcare REIT (THRL) H1 2025 earnings summary

Executive summary

• Portfolio of 94 modern, ESG-compliant care homes valued at £925m, with nearly 6,400 beds, £61m contracted rent, and 99% inflation-linked leases.

• 100% A/B EPC ratings, 99% en suite wet-rooms, and 84% of homes built since 2010.

• Outperformed the MSCI UK Healthcare Property Index over 10 years, ranking second and achieving a 10.8% total return in 2024.

• Maintained robust rent collection (98%) and a diversified tenant base with a 26.1-year WAULT.

• Benefited from demographic tailwinds and a shift toward higher quality care home real estate.

Financial highlights

• Net rental income rose 4% to £29.8m; adjusted EPRA EPS increased 2.6% to 3.13p; dividend per share up 3% to 2.94p, with 107% cover.

• EPRA NTA per share grew 1.8% to 112.7p; total accounting return for six months was 4.5%.

• Portfolio market value increased 2% to £924.7m; net LTV at 22.7%.

• Rent roll increased 3% to £61m, driven by rent reviews and developments.

• EPRA cost ratio stable at 16.1%; net debt/EBITDA at 4.6x.

Outlook and guidance

• Well positioned for future growth with inflation-linked rental uplifts and a focus on portfolio quality.

• Confident in ability to refinance expiring loans, with indicative terms suggesting a weighted average cost on drawn debt of ~4.4%.

• Expect continued strong demand for modern care homes, supporting rental and valuation stability.

• Ongoing focus on selective development, capital recycling, and enhancing shareholder returns.

• Dividend remains well covered, with headroom to absorb modest increases in cost of debt.