Primary Health acquires 20 UK medical centres for €54m

UK healthcare real estate investor Primary Health Properties (PHP) has acquired a portfolio of 20 purpose-built medical centres, located across England and Wales, for £47.1 mln (€54 mln), before costs.

As part of the same transaction, PHP said it had conditionally agreed to acquire a further two medical centres for £6.9 mln, also before costs.

The acquired properties are leased to GP practices, other NHS healthcare operators and pharmacies, with approximately 91% of the rental income being government backed. Nearly all of the leases are reviewed to the open market on a three-yearly cycle.

Harry Hyman, managing director of PHP, said: 'We are delighted to be able to acquire this attractive portfolio of medical centres, with potential for enhancing their valuations through asset management activity.

'Since completing the merger with the MedicX Fund Limited in March 2019, we have invested or committed approximately £100 mln of capital into acquisition and development opportunities.'

PHP said that the acquisition would increase its portfolio in the UK and Ireland to a total of 510 assets with a gross value of just under £2.5 bn, and a contracted rent roll of £131 mln.

Following completion of the portfolio acquisition and capital commitments, PHP has undrawn loan facilities and cash totalling £289 mln.

Opportunities
'We continue to have a strong pipeline of opportunities in the UK and Ireland and are well positioned to continue to grow our portfolio through selective acquisitions and development opportunities,' Hyman added.

'The company's portfolio is extremely well placed to deal with the current Covid-19 pandemic and resulting economic disruption, as it supports the UK primary healthcare system,' he noted.

PHP also said that its rental collection continued to remain robust throughout the crisis, with 98% of UK rents having been collected for the second quarter of the year. Of the £0.7 mln still outstanding, around half is now subject to an agreed monthly payment plan.

In Ireland, 97% of rents due by 1 April 2020 have been collected with less than €0.1 mln still outstanding.

 

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