Impact Healthcare REIT plc Net Asset Value, Dividend Declaration and Update
The board of Directors of Impact Healthcare REIT plc, the real estate investment trust which gives investors exposure to a diversified portfolio of UK healthcare real estate assets, in particular residential care homes, is pleased to provide the following update for the quarter ended 30 June 2019.
NET ASSET VALUE
· Unaudited net asset value (“NAV”) at 30 June 2019 of £299.9 million, 104.67 pence per share (NAV at 31 March 2019: £200.2 million, 104.18 pence per share).
o NAV at IPO in March 2017 of 98 pence per share.
· The Board has today declared the Company’s second interim dividend for the year of 1.5425 pence per ordinary share. This dividend is for the period from 31 March 2019 to 30 June 2019, payable on 30 August 2019 to shareholders on the register on 9 August 2019. The ex-dividend date will be 8 August 2019. This dividend will be a Property Income Distribution (“PID”).
o This is consistent with the prior quarter dividend and reflects the Company’s intention to pay a target aggregate dividend of 6.17 pence per ordinary share for the year to 31 December 20191, an increase of 2.83% over the aggregate dividend paid for 2018.
· The Group’s property portfolio (“Portfolio”) was independently valued (unaudited) at £271.6 million as at 30 June 2019 (valuation as at 31 March 2019: £230.4 million).
o In the quarter to 30 June 2019, the market value of the Group’s Portfolio grew by £41.2 million, or 17.9%.
o This increase in market value includes £35.9 million of completed acquisitions, £2.0 million invested in capital improvements in homes and a net value uplift of £3.3 million (an increase of 1.4% on a like-for-like basis).
EQUITY RAISE, EPRA INDEX INCLUSION AND PORTFOLIO UPDATE
· The Group successfully raised £100 million through a significantly oversubscribed equity issue, the result of which was announced on 10 May 2019.
· The Company was added to FTSE EPRA/NAREIT Global Real Estate Index Series in June 2019, having successfully satisfied the required eligibility criteria during the Index’s recent Quarterly Review.
· At 30 June 2019, the Portfolio comprised 79 residential care homes (3,924 operational beds) let to seven tenants2 on fixed-term leases of 20 to 25 years (no break clauses), subject to annual upward-only Retail Price Index-linked rent reviews (with a floor and cap at 2% p.a. and 4% p.a., respectively). In addition, the Group owns two healthcare facilities leased to the NHS.
· In the quarter, the Group completed on several acquisitions including:
o A portfolio of four homes leased to a subsidiary of the Maria Mallaband and Countrywide Group (MMCG) with 270 operational beds. All of the homes are leased under new 25 year fully repairing and insuring leases and bring the Group’s seventh tenant to the portfolio2.
o Birchlands, located on the outskirts of York with 51 bedrooms and let on a new 25-year lease to Welford, an existing tenant of the Group.
o Kingston Court a 74-bed care home in Carlisle, alongside two additional properties let to NHS Cumbria University Hospital NHS Trust. The care home is leased under a new 25-year lease to Careport, an existing Group tenant.
· The Group exchanged on two further homes: Holmesley, a 52 bedroom care home in Devon, which will be leased to Welford; and Old Prebendal House, a 37-bed care home in Oxfordshire, which will be leased to Careport. Both homes are let on new 25-year leases.
· In total, these eight homes will add 484 beds to the portfolio and the Group committed £45 million to them in the period. During the period over 60% of the new equity raised in May was deployed either into these acquisitions or the repayment of the Group’s revolving debt facilities.
· Weighted average unexpired lease term across the Portfolio of 19.6 years.
· The Portfolio has an annualised contracted rent roll of £21.6 million at 30 June 2019, up from £18.1 million last quarter as a result of RPI-linked rent reviews in the quarter and acquisitions.
Rupert Barclay, Chairman of Impact Healthcare REIT plc, commented:
“We are pleased to have made good progress in deploying the proceeds from our successful equity fundraise during the quarter while maintaining a disciplined approach to new investments. The Group is continuing to make investments that are accretive to the overall property portfolio, continue to diversify our tenant and asset base and provide attractive, index-linked, long term sustainable income for our shareholders as well as the potential for income and capital growth.
The Investment Manager continues to progress a strong identified pipeline of investment opportunities and asset management initiatives that will support our ability to deliver a growing dividend to shareholders while providing an environment in which our tenants can provide high quality care to their residents.”