London, UK, 28 April 2017

Edison issues update on Target Healthcare REIT (THRL)

Target Healthcare REIT (Target) continues to approach full investment, having completed the acquisitions of four care homes in the quarter to 31 March and one more in April. Portfolio value stood at £274.6m at the quarter-end (31 December: £253.1m). The Q217 dividend was the main cause of a slight decrease in EPRA NAV per share to 101.5p (31 December: 101.8p); we expect full dividend cover to be achieved in FY18 as the company becomes fully invested. The secular trends of an ageing population and a persistent lack of modern care homes create a significant opportunity for further investment to underpin the attractive dividend yield.

Target has the longest leases in its sector, inexpensive debt, low LTV and a prospective yield of 5.4% (FTSE EPRA NAREIT index 3.4%). We expect its growing portfolio of income streams to cover the attractive dividend fully in FY18, and Target's shares have performed well in recent weeks as it approaches full investment. The 14% premium to the last reported EPRA NAV may continue to converge with other long-lease healthcare property investors (averaging c 21%) as that process continues.

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