France's Primonial inks €820m German healthcare portfolio buy

French asset manager Primonial said on Thursday that it has signed a binding agreement to acquire a 50% stake in a portfolio of 71 post-acute hospitals in Germany from REIT specialist Medical Properties Trust.

The portfolio, valued at €1.635 bn, is being acquired on behalf of institutional investors, the company said in a statement.

The transaction will be subject to customary closing conditions, including approval of the German Federal Cartel Office, and is expected to close in the course of July 2018.

The deal is in line with Primonial's strategy to expand in Europe as well as to grow in the healthcare property sector. Following the deal, the company will own a €5.2 bn healthcare portfolio, almost equally distributed between Germany and France.

Laurent Fléchet, Primonial group’s Deputy Chief Executive Officer for real estate commented: 'This agreement fully reflects the Primonial group’s strategy of developing its European real estate platform. Its success comes from the combined work of group teams from Luxembourg, Germany and France. The increasing synergy developed over the recent years demonstrates once again our ability to seize innovative and value-creating investment opportunities.'

Further cooperation in Europe
Yann Balaÿ, head of healthcare real estate investment, added: 'This is a significant deal that will allow us to strengthen our position in this sector both in Germany and in Europe. We hope that this will pave the way for fruitful future cooperation with Medical Properties Trust in Europe.'

Earlier this week the property investment management arm of Primonial also unveiled plans to build up a €4 bn residential property portfolio across Europe over the next three years, up from €800 mln at present.
In a statement this week, the company said that it plans to increase the residential share of its portfolio from 6% at year-end 2017 to 20% by mid-2021, while maintaining its overall target of €20 bn in assets under management, across all asset classes.

Primonial REIM currently manages €14 bn of real estate assets, largely office and healthcare properties.

‘In just two years we have become one of the leading managers of healthcare real estate in the Eurozone,' commented Primonial REIM’s Chairman Grégory Frapet. 'We believe that there are considerable opportunities in the residential real estate market in this region and our ambition is to become a leading player in this segment as well. Over the past two years we have created a dedicated team of experts in this asset class, who are able to pick the best opportunities in the market.'

Last year the company made its largest acquisition in the residential sector to date with the purchase of a €400 mln portfolio in Marseille. Primonial said that it is currently considering further housing transactions in France and elsewhere in the Euro zone.


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