Target Healthcare REIT has reported that its contractual rent increased by 2.4% in the second half of 2023, compared to the previous six months, to £57.9 million, including like for-like rental growth of 1.9%.

The values of its portfolio increased by 4.9% over the previous six months to £911.1 million, primarily driven by a 1.4% like-for-like valuation increase, comprising 2% from inflation-linked rental uplifts and the unwind of rent-free periods offset by 0.6% due to outward yield movements, and by acquisitions and capital expenditure of 3.5%.

 Target Healthcare’s chair Alison Fyfe said: “Against one of the more challenging backdrops in recent times, we have delivered an accounting total return of plus 4.9% and earnings growth of 1.3% which is a strong performance when benchmarked against the wider real estate sector. Our portfolio is fully let, provides inflation-linked annual rental growth supported by tenants with robust underlying trading, and has historically demonstrated a low volatility in asset valuations.

 “Commercial real estate is experiencing many headwinds right now, though we note a clear bifurcation in sentiment towards high-quality assets with a solid long-term future in their current or near-current state, and those that cannot be described in that way. Investors increasingly value energy-efficiency, social impact and positive experience for users and we remain deeply proud to be running a portfolio and strategy with real impact and longevity.”