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Primary Health Properties Plc - Acquisition of Portfolio and Rental Collection Update

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Primary Health Properties PLC

Acquisition of Portfolio and Rental Collection Update

Portfolio acquisition

Primary Health Properties PLC ("PHP" or the "Company"), one of the UK's leading investors in modern primary healthcare facilities, announces that it has acquired a portfolio of 20 purpose-built medical centres, located across England and Wales, for a price of £47.1 million, before costs.  As part of the same transaction, PHP has conditionally contracted to acquire a further two medical centres for £6.9 million, 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 and substantially all of the leases are reviewed to the open market on a three-yearly cycle. 

This acquisition will increase PHP's portfolio in the UK and Ireland to a total of 510 assets with a gross value of just under £2.5 billion and a contracted rent roll of £131 million. Following completion of the portfolio acquisition and capital commitments PHP has undrawn loan facilities and cash totalling £289 million.

Rental collection continues to remain robust

In the UK, 98% of rents for the second quarter of the year have been collected with £0.7 million still outstanding, approximately half of this is now subject to an agreed monthly payment plan. Short-term rent concessions for the quarter have been given on rents totalling less than £0.1 million.

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

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

"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 million of capital into acquisition and development opportunities.

"We believe that the portfolio presents several good opportunities to enlarge the premises, extend the lease terms and obtain an uplift in rent, as the majority of the medical centres represent key facilities within their local healthcare economy.  The current coronavirus pandemic is expected to reinforce the need for modern, integrated primary care facilities to relieve pressure on hospitals and A&E facilities.  

"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.

"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."