27 July 2017

Primary Health Properties PLC

Acquisition of three properties

Primary Health Properties PLC ("PHP"), the UK's leading investor in modern primary healthcare facilities, announces that it has acquired, in two separate transactions, three modern, purpose built healthcare facilities for a total consideration of £35.5 million (net assets and debt acquired of £35.5 million).

In the first transaction, PHP has agreed to acquire the entire issued share capital of Ettrick Health Limited, a company whose sole activity is the ownership of the Low Grange Health Village, Middlesbrough, and the Evenwood Medical Centre, Bishop Auckland, for a total consideration of £27.1 million (net assets and debt acquired of £27.1 million).  These facilities together serve approximately 25,000 patients.

Low Grange Health Village is fully let to a combination of tenants, with a weighted average unexpired lease term ("WAULT") of approximately 17.3 years, and approximately 86% of the income being generated from two GP practices and NHS Property Services.  At the facility, 96% of the income benefits from three-yearly fixed rent increases of 3% per annum.  The asset acquired also includes an associated expansion site.  The smaller Evenwood Medical Centre is fully let to NHS Property Services for a 20 year term with three yearly upwards only RPI reviews, with approximately 13 years unexpired.  

PHP has also acquired, in a separate transaction, a modern, high quality primary care centre in Syston, Leicestershire for a cash consideration of £8.4 million (net assets acquired of £8.4 million).

The Syston Health Centre comprises of 2,575m² of modern purpose built space. It is fully let to two GP practices with a combined patient list of over 23,000 in addition to the Leicestershire Partnership NHS Trust, who provide integrated mental health, learning disability and community health services from the facility, and a pharmacy.  The weighted average unexpired term of the leases is approximately 16.1 years.

These acquisitions increase PHP's portfolio to a total of 303 assets with a gross value of over £1.3 billion and a contracted rent roll of £71 million, and the unexpired lease terms will be accretive to the overall WAULT.

Harry Hyman, Managing Director of Primary Health Properties, commented:

"These acquisitions represent an important addition to PHP's portfolio, given their substantial lot sizes and importance in their respective communities, with the majority of the income secured by government backing.  All the assets are high quality, purpose built properties and with facilities capable of meeting the needs and requirements of a modern primary care service.  We continue to have a strong pipeline of acquisitions in the UK and Ireland and are well positioned to grow our portfolio of modern, primary care infrastructure over the long term."

More information on Primary Health Properties PLC can be found on www.phpgroup.co.uk. 

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