Target Healthcare REIT (THRL) H2 2025 earnings summary

Executive summary

• Delivered a 9.3% total accounting return, driven by a 3.7% EPRA NTA increase and a 3% dividend rise year-over-year.

• Maintained a robust, modern, ESG-compliant portfolio of 93 care homes with nearly 6,500 beds and strong sector tailwinds.

• Achieved 7.5% annualized total accounting returns since launch, consistently outperforming the MSCI Annual Healthcare Property Index.

• Executed the largest disposal since IPO, selling £86 million of assets at an 11.6% premium to book value, reducing tenant concentration.

• Active asset management and capital recycling, with all homes fully let and no voids since launch.

Financial highlights

• Rental income increased 3% year-over-year to £60.6m, mainly from inflation-linked growth and new developments.

• EPRA earnings per share decreased by 0.8% to 6.08p due to exceptional costs from tenant administration.

• Dividend increased by 3% to 5.884p, covered at 103%.

• Portfolio valuation rose 2.4% year-over-year to £929.9m, with like-for-like growth of 2.6%.

• Operating expenses rose 27% due to non-recurring administration and re-tenanting costs.

Outlook and guidance

• Strong pipeline of over £150 million in accretive investment opportunities at yields above 6%.

• First acquisitions from the pipeline expected in November, with efficient reinvestment of disposal proceeds planned.

• Commitment to progressive dividend policy, with a further 2.5% increase announced.

• Dividend cover expected to be maintained during capital redeployment.

• Focus on scaling the portfolio with high-quality, en suite wet-room care homes.