Primary Health Properties (PHP), a UK and Ireland healthcare infrastructure investor, has created a 50:50 joint venture with Singapore-based investor GIC, seeding a new private hospital platform with 27 assets valued at £700 million (€832 million). The deal gives PHP net proceeds of about £500 million to pay down variable rate debt, including the bridging facility used to fund its 2025 Assura acquisition.

The seed portfolio will transfer at a 5 percent discount to its 31 December 2025 book value, with a weighted average unexpired lease term of 22 years under long-term index-linked leases. PHP will earn recurring management fees with potential performance fees.

Proceeds will repay and cancel the acquisition bridging facility and a £266 million term loan, taking net debt to about £2.9 billion from £3.4 billion at 30 June, with loan to value expected below 55 percent.

PHP is a FTSE 250 healthcare property investor with a £6 billion portfolio. GIC is a global institutional investor, and the venture will invest in private hospital infrastructure.

“In addition to generating proceeds to reduce our borrowings, the transaction enhances returns on invested equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure,” said Mark Davies, CEO of PHP.

“Together, we are well positioned to capitalise on the significant structural growth opportunities in the private healthcare market,” Davies added.

“The transaction helps PHP to reduce its leverage, which has been a concern following its acquisition of Assura, while allowing PHP to retain meaningful exposure to the long-term growth prospects of private healthcare,” said Matthew Read, senior analyst at QuotedData.

The structural driver is balance sheet repair after the Assura acquisition, with the deal expected to complete in November and net debt to EBITDA forecast to fall below 10 times.

For the sector, the venture confirms that private hospital property owners are recycling capital into joint platforms to cut debt while keeping exposure and management income.

Source: realassets.ipe.com / uk.finance.yahoo.com / uk.investing.com / directorstalkinterviews.com / quoteddata.com