High demand boosts Impact Healthcare REIT’s portfolio and rents
Affordable care homes are driving returns and reducing risk for Impact Healthcare REIT.
In its results for the six months to 30 June, EPRA NTA rose by 2.6% to £488.9m or 117.98p per share, primarily driven by the increase in portfolio value.
The REIT’s property investments, spanning 140 care homes and 7,721 bedrooms, were valued at £670.1m as at 30 June, up 2.9% from £638.2m last year, and reflecting a 5.5% total accounting return for the period.
Affordable care homes are driving returns and reducing risk for Impact Healthcare REIT.
In its results for the six months to 30 June, EPRA NTA rose by 2.6% to £488.9m or 117.98p per share, primarily driven by the increase in portfolio value.
The REIT’s property investments, spanning 140 care homes and 7,721 bedrooms, were valued at £670.1m as at 30 June, up 2.9% from £638.2m last year, and reflecting a 5.5% total accounting return for the period.
Contracted annual rent roll totalled £51.1m compared with £48.1m last year, thanks to a 3.8% increase in rent for 102 homes following rent reviews in the first half of 2024. Resident occupancy also improved slightly to 88.9% from 88.2% at the start of 2024.
The REIT increased its dividend payment to 3.475p from 3.385p paid a year ago.
Pretax profit rose by 4.6% year-on-year to £26.33m from £27.59m. Last year, the company’s earnings benefited from a £1.2m gain from acquisitions which has not been replicated this year. Excluding valuation movements, EPRA earnings were up to £17.6m from £17.2m and adjusted earnings were broadly flat at £15.3m.
Simon Laffin, chair at the REIT, said: “We aim to provide residential care homes which are both high-quality and affordable, in order to deliver long-term sustainable returns to our shareholders. All our lease rentals are inflation-linked, and the vast majority are capped at 4%, with a minimum of 2%, per annum. The spike in inflation to double digits in 2023 therefore did not flow fully into rent increases but strengthened the financial viability of our tenants.
“Strong performances from our tenants are a key factor in reducing risk to our income stream and improving our risk-adjusted returns and valuations. We were able to increase our fully covered dividend this year, whilst keeping rents affordable for our tenants. The affordability of our rent to tenants, and consequently the affordability of care home fees to residents, are moreover crucial to the continued successful provision of residential and nursing care.”
