Target Healthcare REIT, a specialist UK care homes investor, plans to increase its quarterly dividend in respect of the year to 30 June 2015 by two per cent to 1.53 pence per share.
The dividend increase is a result of initial rental yields surpassing the seven per cent blended initial yield, modelled pre-launch and the impact of upward-only inflation-linked rental agreements.
The company’s total dividends declared for the 15 month period to 30 June 2014 totalled eight pence per share.
Target is now fully invested in a portfolio of quality, modern purpose-built care homes in the UK, creating the opportunity for additional performance uplift.
As at 30 June 2014, Target owned 18 care homes with a market value of GBP83.2 million. During the period from 1 April to 30 June, Target Healthcare REIT acquired the following:
• In April, a modern, purpose-built care home located in Flixton, Greater Manchester for approximately GBP3.8 million including acquisition costs;
• Exchanged contracts to acquire another care home in York, which is due to be completed and opened in summer 2014 for approximately GBP5.1 million including acquisition costs;
• In May, a portfolio of three modern, purpose-built residential care homes located in Wigan, Stockport and Coventry for approximately GBP13.9 million including acquisition costs;
• In June, two purpose-built care homes - Bromford Lane and Beechdale Manor - in the Midlands, for approximately GBP14.3 million including acquisition costs.
In July 2014 Target acquired a further three purpose-built care homes and four specialist care bungalows in Norfolk and Northern Ireland for approximately GBP20.4 million including acquisition costs, and has acquired another care home in Leicestershire for approximately GBP6.0 million including acquisition costs. The completion of these transactions has seen the company's investment portfolio increase to 23 care homes with a market value of GBP108m.
Following the addition of these properties to its portfolio, Target has now invested all of its existing equity and has drawn down substantially all of a GBP30 million term loan and revolving credit facility.
Target’s unaudited net asset value per share as at 30 June 2014 was 94.7 pence.
Kenneth MacKenzie, managing partner of Target Advisers, says: "We are very pleased with the company’s significant acquisition activity during the period which has added further quality assets to the portfolio allied with the expansion of the company's tenant base and geographic reach. We are also gratified to have put all of our cash to work, reducing drag and generating further value for our investors. The strong performance of the existing portfolio confirms our conviction in the company’s investment strategy and we look forward to the future contribution of the growing portfolio.”