This article first appeared on GuruFocus .
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Total Accounting Return:7.8% since 2013.
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Rental Income:GBP 59.5 million annualized contracted rent as of December 2025.
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EPRA Earnings Per Share (EPS):Increased by 8.5% to 3.4p.
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Dividend Per Share:3.02p, a 2.5% increase compared to the prior year.
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EPRA Net Tangible Assets (NTA):Increased by 4% to 119.4p.
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Total Accounting Return for Six Months:6.8%.
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Portfolio Value:Approximately GBP 900 million.
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Rent Arrears Recovery:GBP 1.9 million recovered.
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Adjusted EPRA Cost Ratio:15.4%.
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Loan-to-Value (LTV):Reduced to around 15% from almost 22% at June year-end.
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Average Rent Cover:1.9 times, the highest since IPO.
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Portfolio Occupancy:Resident occupancy stable at around 85% for mature homes.
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Disposals and Acquisitions:10 disposals and 3 acquisitions during the period.
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Pipeline Yield:Net initial yield in excess of 6% for pipeline assets.
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Release Date: March 18, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Target Healthcare REIT PLC ( LSE:THRL ) reported a 7.8% total accounting return since 2013, showcasing strong long-term performance.
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The company has consistently outperformed the MSCI Annual Healthcare Property Index, with a cumulative outperformance of 93% by the end of 2025.
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The portfolio boasts a robust rental income of just under GBP60 million from 86 homes, with 100% of income linked to inflation.
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The company successfully refinanced its bank debt and recovered GBP1.9 million of rent arrears, demonstrating effective financial management.
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Target Healthcare REIT PLC ( LSE:THRL ) achieved a 4% increase in EPRA NTA, driven by property value uplifts and healthy dividend cover.
Negative Points
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The company faces operational challenges, including tenant issues and the need for active asset management.
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Energy and food costs are expected to rise, potentially impacting tenant costs and profitability.
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The company has a widespread in valuation yields, ranging from 5.6% to 8.9%, influenced by covenant strength and operational profitability.
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There is a need for continuous capital recycling, with the company selling older assets to maintain a modern portfolio.
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The sector faces regulatory challenges, with instability in the regulator's leadership and potential legislative changes impacting operations.
Q & A Highlights
Q: You have previously mentioned that the pipeline of opportunities is in excess of available capital. Should we expect further targeted disposals? A: Kenneth MacKenzie, CEO: The reality of the sector is that from time to time, there's always a disposal or two. Over the last four years, we have sold 15 or 16 homes. Our initial focus is on utilizing significant headroom with our current facilities for further targeted acquisitions.
Q: Great to see the success of asset management and return to 100% rent collection. However, should we still anticipate tenant issues from time to time? A: James MacKenzie, Head of Investor Relations: Yes, as Kenneth mentioned, this is a very operational portfolio. From time to time, there will be issues, but we're pleased to be back up to 100% rent collection by the end of the fiscal year.
Q: It looks like energy costs are going to rise significantly and probably food costs too. Can you talk about their significance to tenant costs? A: Kenneth MacKenzie, CEO: Energy costs for a care home are either 2% or 3% of revenue. If they double, it goes to 3% or 4.5% of revenue. We had concerns about this a few years ago, but we're in a good place now.
Q: On the homes that were retenanted, how do the new rents compare to the old? Are the lease terms and rent reviews also the same? A: Kenneth MacKenzie, CEO: The lease terms and rent reviews are the same, with some leases extended to 35 years. The new rents are either at the same level or, in one case, GBP25,000 ahead of the old rent.
Q: Valuation yields range from 5.6% to 8.9%. What accounts for this widespread in valuation yields? A: Kenneth MacKenzie, CEO: Covenant strength and operational profitability at the home are the variables involved in that spread.
Q: Do you have an attribution analysis of the consistent property outperformance versus the sector? A: Kenneth MacKenzie, CEO: We don't have strong visibility on the MSCI index details, but the outperformance is likely due to the underlying robustness of our assets compared to others.
Q: On capital recycling, what is the strategy, and what value or amount should we expect on an annual basis? A: Kenneth MacKenzie, CEO: We aim to sell older homes and buy newer ones to keep the portfolio fresh and young. It's about making the right returns for shareholders, focusing on quality and performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
