Quarterly Investor Report

RNS Number : 5658I

Target Healthcare REIT Limited

09 December 2015

To: RNS Company Announcements

Date: 9 December 2015

Company: Target Healthcare REIT Limited

Subject: Quarterly Investor Report

Quarterly Investor Report

The Group today publishes its quarterly investor report for the period ended 30 September 2015 on its website at http://www.targethealthcarereit.co.uk/Financial%20reporting.aspx and is summarised below.

- Recent news

In October and November 2015, the Group acquired three purpose-built care homes, totalling approximately £19m. On 20 November, the Group successfully completed the placing of 29.9m shares, at an issue price of 104 pence per share, generating gross proceeds of £31.1m.

- Pipeline

The Group expects by the end of 2015 to exchange on £6m of care home assets where terms have been agreed. In addition, the Group has identified and agreed terms on a further £14m of assets and it hopes to finish its due diligence and complete on these assets in early 2016.

- Performance

The Group's disciplined investment appraisal and portfolio management activities have contributed to a capital growth in EPRA NAV per share of 1.3% over the quarter to September 2015. This is driven by asset valuation growth (1.5% increase on June 2015), which has contributed 1.5 pence to the EPRA NAV per share. There were uplifts from rent reviews on 9 properties during the period.

- Market Commentary

In July, the UK Government announced that the care cost cap would be deferred from 2016 to 2020. For many care home operators, this is viewed as a positive, as more elderly people will remain 'self-funded'. The sector has now turned its attention to concerns around funding the new 'National Living Wage'. The linked Autumn Statement decision to allow councils to raise council tax by up to 2%, ring-fenced, was met with some derision from both councils and operators, who believe it will be wholly inadequate. The care home sector has responded in the only way it can, with Bupa being the first to announce rises of 8%+ in the New Year for private residents. Other operators will follow suit. Recent research by sector expert Laing & Buisson has also highlighted the first significant fall for some time in UK care home places which, coupled with the well documented growth in the over 85s population, is likely to benefit the care sector in the future

- Summary Balance Sheet

	30 September 2015	30 June 2015
	£m	£m
Investment properties	145.8	143.7
Cash	27.2	29.2
Net current assets / (liabilities)	(0.4)	(2.1)
Bank loan	(31.5)	(31.5)
Net assets	141.1	139.3

EPRA NAV per share	99.2p	97.9p

Ignores the effect of fixed/guaranteed rent reviews