Northwest Healthcare Properties Real Estate Investment Trust has completed its strategic review with the sale of its entire UK portfolio to London-listed Assura for £500m (€584.24).
The UK portfolio comprises 14 private hospitals with an average of 36 registered beds per hospital. The portfolio comprises assets across the UK, with 64% of current rental income derived from London properties.
Assura, which is acquiring the portfolio for a combination of cash and shares, said the deal accelerates its strategy of large-scale diversification into new sectors by adding “high-quality, income-generating” UK assets at an attractive price.
The 245.3m shares issued to Northwest Healthcare, valued at £100m, represent approximately 8% of Assura’s publicly traded shares.
The deal is expected to contribute to earnings growth and support the company’s dividend policy, Assura added.
Jonathan Murphy, Assura’s CEO, said the acquisition “accelerates the delivery of our broader healthcare strategy, securing increased exposure to the structurally supported private healthcare market as we continue to diversify our offering in line with UK healthcare demands”.
“The acquired portfolio – with long average lease length of 26 years and index-linked rent reviews – complements our existing assets and will benefit from our sector relationships, development and asset enhancement capabilities as the leading listed UK healthcare property investor and developer.”
Northwest Healthcare said it has concluded its strategic review process with the sale of its entire UK portfolio. The sale marks the end of a process initiated on 8 August 2023, during which the real estate investment trust sold assets totalling about C$1.6bn (€1.1bn).
The TSX-listed REIT owns and operates healthcare real estate infrastructure in North America, Brazil, Europe and Australasia.
Ed Smith, Assura’s chairman, said: ”The UK healthcare crisis is getting more severe with each year, a point well recognised by the incoming Labour government. This worsening crisis is driving increased demand for healthcare infrastructure including private health estates, and today’s acquisition positions us as the clear leader in this sector of the market.
“We are now better positioned than ever to use our expertise and capital to help support the NHS and the country’s wider healthcare market as together we address the health challenges of the modern day.”
Craig Mitchell, Northwest Healthcare’s CEO, said: “These high-quality assets represent significant future growth potential buoyed by favourable healthcare market dynamics in the UK and Assura’s sector-leading position, long-term relationships and expertise in asset management, development and enhancement.
“Our conviction in Assura and their strategy is evidenced by Northwest taking an equity stake in Assura as part of this transaction, allowing us to benefit from their future success.”
Dale Klein, non-executive chair of the Northwest Healthcare board, said: “This includes a commitment to further asset sales in order to continue to simplify the business and strengthen the balance sheet.
“These strategic actions will help us to continue deleveraging as we work towards our goal of becoming an institutional-quality REIT.”
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