LONDON (ShareCast) - (Sharecast News) - Primary Health Properties has acquired a portfolio of 20 purpose-built medical centres in England and Wales for ?47.1m before costs, it announced on Monday.
The FTSE 250 company said that as part of the same transaction, it conditionally contracted to acquire a further two medical centres for ?6.9m, before costs.

It said the acquired properties are leased to GP practices, other NHS healthcare operators and pharmacies, with around 91% of the rental income being government-backed, and "substantially" all of the leases reviewed to the open market on a three-yearly cycle.

The acquisition would increase the firm's portfolio in the UK and Ireland to a total of 510 assets with a gross value of just under ?2.5bn, and a contracted rent roll of ?131m.

Following completion of the portfolio acquisition and capital commitments, PHP said it had undrawn loan facilities and cash totalling ?289m.

At the same time, PHP said that in the UK, 98% of rents for the second quarter of the year had been collected with ?0.7m still outstanding - approximately half of which was now subject to an agreed monthly payment plan.

Short-term rent concessions for the quarter had been given on rents totalling less than ?0.1m.

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

"We are delighted to be able to acquire this attractive portfolio of medical centres, with potential for enhancing their valuations through asset management activity," said managing director Harry Hyman.

"Since completing the merger with the MedicX Fund Limited in March 2019, we have invested or committed approximately ?100m 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."

Hyman said the current Covid-19 coronavirus pandemic was expected to reinforce the need for "modern, integrated primary care facilities" to relieve pressure on hospitals and accident and emergency 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."

At 0835 BST, shares in Primary Health Properties were up 0.29% at 157.45p.

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