Primary Health Properties Plc - Portfolio Update

Primary Health Properties PLC

Portfolio Update

Primary Health Properties PLC ("PHP"), one of the UK's leading investors in modern primary healthcare facilities, publishes an update on the property portfolio and net debt as at 31 March 2019 following the completion of the successful all share merger with MedicX Fund Limited ("MedicX") on 14 March 2019.

Property portfolio

The portfolio now comprises 484 properties with a gross book value of over £2.3 billion (31 December 2018: £1.5 billion) and a contracted annualised rent roll in excess of £125 million (31 December 2018: £79.6 million). The portfolio includes 15 properties in Ireland including developments at Bray, Athy, Rialto and Mullingar representing 6% of the total portfolio (31 December 2018: 6%).

The portfolio's average lot size has remained constant at £4.8 million (31 December 2018: £4.8 million).

 

Number of properties

Book value

£ million

 

%

Average lot size (£ million)

>£10m

42

585

25.3%

13.9

£5m - £10m

107

746

32.2%

7.0

£3m - £5m

159

609

26.3%

3.8

£1m - £3m

169

370

16.0%

2.2

< £1m (including land £2.7million)

7

6

0.2%

0.5

Total

484

2,316

100.0%

4.8

The geographical analysis of the portfolio by book value is as follows:

Midlands and East Anglia

23%

North East

16%

South East

14%

North West

13%

Scotland

8%

Wales

8%

London

7%

Ireland

6%

South West

5%

Total

100%

The security and longevity of our income are important drivers of our secure, long-term, predictable income stream and enable our progressive dividend policy. 90% (31 December 2018: 91%) of the rent roll is funded directly or indirectly by the NHS in the UK and HSE or government funded bodies in Ireland. The portfolio also benefits from an occupancy rate of 99.5% (31 December 2018: 99.8%).

68.1% of the rents are reviewed on an open market basis, typically every three years and are impacted by land and construction inflation. The balance of the portfolio has either RPI (25.2%) or fixed uplifts (6.7%) which provide an element of certainty to future rental growth within the portfolio.

The portfolio's weighted average lease length at 31 March 2019 was 13.4 years (31 December 2018: 13.1 years) and only 1.6% of our income expires over the next three years and 68.8% expires in over 10 years. The table below sets out the lease expiry profile of our income.

< 3 years

1.6%

4-5 years

5.3%

5-10 years

24.3%

10-15 years

35.2%

15-20 years

19.7%

> 20 years

13.9%

Total

100.0%

 

Net debt

As at 31 March 2019 the enlarged group's net debt stood at £1,115 million (31 December 2018: £673 million) with a loan to value ratio of 48.1% (31 December 2018: 44.8%) and an average cost of debt of 4.0% (31 December 2018: 3.9%). The weighted average debt maturity was 7.2 years (31 December 2018: 5.4 years).

 

 

Harry Hyman, Managing Director of PHP, commented:

 

"We are delighted to have successfully completed the merger with MedicX bringing together two highly complementary portfolios and teams in the UK and Ireland and the combined business represents a stronger platform for the future. This transformational deal has created significant value for shareholders of the enlarged group and we continue to work assiduously to deliver the significant operating and financial savings outlined when the merger was announced earlier this year."