Primary Health Properties completed £13.5m of acquisitions in the first quarter of 2017.
Cove Bay Medical Centre and Pitmedden Medical Centre, two modern, purpose-built healthcare facilities located close to Aberdeen, were acquired in January 2017 for a total consideration of £7.2m. The properties have unexpired terms of 15.3 years and 13 years respectively.
PHP also completed its second acquisition in Ireland, contracting to provide development funding for the construction of a new primary care centre in Carrigaline, County Cork for a total cost of €7.3m.
It settled 48 rent reviews in the first quarter and increased its rent by £200,000 with a weighted average annualised increase of 1.6%, which is an increase on the 0.9% achieved in 2016.
In March 2017, new senior secured 10-year notes for a total of £100m were issued at a fixed coupon of 2.83%. The issuance represented PHP’s first transaction in the private placement market and demonstrates its ability to source funding from a broad range of alternative providers at attractive rates.
The proceeds of the issue have been partially applied to refinance PHP’s existing “club” facility with Royal Bank of Scotland and Santander. The £115m club facility, which was due to mature in August 2017, was replaced by a £50m bilateral term loan with RBS.
The new RBS facility is for an initial four-year term and PHP retains an option to both extend the term by a further year and increase the loan facility to a maximum total of £100m, with the agreement of RBS.
Harry Hyman, managing director of PHP, said: “PHP has made a good start to 2017, completing further acquisitions and growing rental income. We have a strong pipeline of potential assets both in the UK and Ireland helping us to achieve our future growth targets.
“PHP will continue to focus on growing earnings through selective acquisitions, strategic asset management activity, careful debt management and securing growth from rent reviews. This will enable PHP to continue to pay an increased, fully covered dividend to shareholders.”
To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette
