French asset manager Primonial REIM has made a giant step forward in its plans to raise its exposure to the healthcare property sector by sealing an exclusivity agreement to acquire Icade’s stake in its healthcare arm, Icade Santé, as well as the €850 mln asset portfolio owned by Icade Healthcare Europe (IHE).
In a statement, French REIT Icade said that its total investment in the Healthcare Property Investment Division is currently estimated to be worth €2.6 bn based on EPRA NTA as of December 31, 2022.
Under the first stage of the transaction, which should be completed by the end of July 2023, Icade will sell 64% of its shares in Icade Santé for €1.4 bn. In addition, Primonial REIM would take over the management of the portfolio from the closing date.
Icade’s remaining stake in Icade Santé is expected to be sold by the end of 2025, mainly to funds managed by Primonial REIM or to investors identified by Primonial REIM based on Icade Santé’s most recently published EPRA NTA on the sale date.
‘This liquidity event, one of the Group’s priorities for 2023, will allow Icade to crystallise the value of its Healthcare Property Investment Division and unlock capital gains on its investments in Icade Santé and IHE, resulting in €710 mln in mandatory special dividends payable within two years of each sale being made,’ the vendor said in a statement. The substantial cash generated by this transaction would also help Icade to fortify its balance sheet and seize potential growth opportunities, it added.
Speaking to PropertyEU earlier this month, Primonial REIM’s new CEO Laurent Fléchet pointed out that the firm’s main investment focus over 2023 will be on the healthcare sector, which currently represents roughly 35% of the group’s €35 bn of assets under management. Ideally, this asset class could grow to represent up to 45% of the group’s portfolio in the future, knocking offices from the top spot, he added.
‘We have a very strong appetite for this asset class,’ Fléchet said, ‘As do our investors. This is a quite unique property segment, which showed resilience during the pandemic, and it is not experiencing the level of correction and repricing other sectors are seeing. We are also looking at diversifying within this sector by investing not only in nursing homes but also in private hospital clinics and preventive care facilities.’