Target Healthcare Reit Share Discussion Threads

[fred205] 12/10/2022 09:52

I am guessing the root cause of this rout in the share price is big investors who borrowed money at short term low interest to buy high yielding property shares . Now the interest rate on the debt is rolling over at higher levels they need to sell or risk owing more than their holding is worth.
Add to this the higher food costs/ short labour supply high energy costs to keep guests warm and the profitability of the tenants comes into question.
Investors do need to understand I think that the use of borrowed money by big shareholders to buy high yielders renders all such shares risky when interest rates rise.
If anyone thinks this is wrong please do inform. Thank you.

[wallywoo] 12/10/2022 08:26

It's funny that a investment that is intended to be safe and income generating should be so volatile. I notice that much of their long term debt is with Phoenix. I wonder whether they are getting caught up in the pensions crunch that is hitting the pensions providers. At any rate I'm not selling Tin hat on and will ride out this storm and will pick up a few more over the next week or two.

[jong] 12/10/2022 07:43

Assume forced sellers driving price down with few buyers. ? Same with RECI and SUPR. I'm thinking of being brave and picking up a few more for a long term view and yield.

[wallywoo] 11/10/2022 13:47

Something has to give here. Net asset value is 111.8p per share. At 83.5p they are trading at roughly 35% discount to NAV, with a 8% yield. Of course many reit investments are also getting hit hard, though demand for care homes will exist even if the economy goes haywire. Loading up, too cheap imo.


Private equity were buying up REIT investments over the last few years. With the pound so low against the dollar and the discount to NAV, I can see a takeover offer coming.

[spoole5] 27/9/2022 13:06

Being lumped into the indiscriminate REIT sell off.

[sammu] 27/9/2022 12:43

So what's going on here then - catching up with the market.

An interesting read CWA, which answers grim's question above:
While all rents paid to Target are linked to Retail Price Index (RPI) inflation (c 96%) or fixed (c 4%), uplifts are typically capped at c 4% with a floor of c 2%. This means that while RPI inflation is above 4% Target’s rental growth will lag in real terms, but it contributes towards rents remaining affordable for tenant operators and enhances the security of Target’s income. The company estimates that rent costs represent c 20% of gross revenues for its typical established home.

The debt isn't excessive and plenty but not all is fixed.

[cwa1] 12/9/2022 11:49

Operational progress and positive returns

[spoole5] 01/9/2022 14:42

On a rare discount now

[cwa1] 01/9/2022 06:14

Sounds positive on the whole:-

Portfolio update

Target Healthcare (LSE: THRL), the UK listed specialist investor in modern, purpose-built care homes, is pleased to provide the following update on its portfolio initiatives and rent collection.

The Group's Net Asset Value, Corporate Update & Dividend announcement published on 4 August 2022 detailed re-tenanting initiatives which would, in aggregate, reallocate nine homes providing 8.3% of contractual rent to six alternative operators, and alleviate the impact on recent rent collection, which was 90% for the quarter ended 30 June 2022.

An agreement has since been reached with the incumbent tenant in seven of these homes (6.2% of June 2022 contractual rent) whereby they will remain in place as a tenant and operator. The full settlement of outstanding rental arrears to 30 June 2022 has been received, resulting in the rent collection for the quarter ended 30 June 2022 increasing to 94% from 90%, and for the quarter ended 31 March 2022 increasing to 95% from 92%, reflecting the previous receipt of partial rental payments. Furthermore, all rent due in respect of the current quarter to September 2022 has been received, as has penalty interest in respect of all overdue rent.

The tenant has reaffirmed their long-term commitment to the homes following the challenges presented by the COVID-19 pandemic and has pledged additional security from another company in the tenant's group.

Scott Steven, Head of Asset Management of Target Fund Managers:

"The commitments made by all parties during this process is strong evidence of the trading outlook for these assets, and of the overall demand for modern, ESG-compliant care home real estate from progressive, quality care providers. Underlying resident occupancy across our portfolio continues its steady recovery and reflects the long-term structural demand for care places in our homes. This is long-awaited from our tenants and while mindful of the inflationary and staffing headwinds they face, we are generally optimistic that trading improvements will continue in the coming months."

[saltaire111] 11/8/2022 11:02

Ex d today. 1.69p a share.

[grim] 09/8/2022 13:47

Anyone know how their rent reviews linked to inflation actually work. They use the phrase 'cap and collar' which would indicate that there is an upward limit but I can't see any annual report that tells us how limited that is. If it's a 4% cap (like with SUPR) then it's not a lot of use when inflation is 10%+.

[catch007] 04/8/2022 09:41

I wasn't aware of the two struggling tenants until todays update - gives some insight into recent share price weakness. Good to see remedial action in retenanting sorting out the issues. Good update imho.

[saltaire111] 04/8/2022 06:07

Another strong set of results.

Salty

[igoe104] 09/6/2022 06:57

Hopefully should attract more institutional buying now its been added to the FTSE 250....

[saltaire111] 09/6/2022 06:30

Ftse 250 confirmed today.

[ec2] 06/6/2022 09:00

Will be joining the FTSE 250 later this month. Should give a bit of a boost.

[jong] 12/5/2022 08:53

XD Today - 1.69p payable on 27th May

[spoole5] 16/2/2022 10:19

IHR hasn't been hit. Bizarre

[ec2] 16/2/2022 08:19

Nothing that stands out to me.

[wilwak] 15/2/2022 17:26

Very odd. Is there something we don’t know about????

[golden_eagle] 15/2/2022 17:04

Looking good value now at at a modest discount to NAV and 6%+ yield

[novision] 11/2/2022 15:27

Price below NAV now....usually at premium....

[wilwak] 08/2/2022 23:14

Yes. Why down so much?

[spoole5] 08/2/2022 13:05

Getting a bit of a beating