Universities Superannuation Scheme (USS) and Assura have partnered in a £250m (€292m) UK joint venture to invest in community healthcare buildings for the National Health Service (NHS).
USS, the £75bn principal pension scheme for universities and higher education institutions, will hold 80% of the venture, while Assura will hold the remaining 20% in the venture that has been seeded with a £107m portfolio of seven assets transferred from Assura’s existing portfolio.
The portfolio was valued at a “small discount to the March 2024 valuation”.
It is intended that the net cash proceeds of £85m received will be recycled into Assura’s attractive pipeline of acquisition and development opportunities across medical centres and broader healthcare markets.
Assura will act as property and asset manager, receiving asset management fees linked to the valuation of the portfolio.
The joint venture is targeting acquisition-led growth to £250m over the next three years, with the potential to grow to £400m thereafter. It will focus exclusively on assets let directly to NHS or general practitioner tenants with rents linked to inflation or with fixed uplifts.
Jonathan Murphy, CEO of Assura, said: “This important transaction highlights the attractive investment characteristics in the healthcare sector and specifically the long term resilient cash flows generated by our assets.
“As well as demonstrating our ability to re-deploy capital into our pipeline of opportunities in broader healthcare markets, we have sourced new capital that will fund investment in healthcare infrastructure that is so badly needed to enable better health outcomes.”
Alex Turner, head of property at USS, said: “We are looking forward to working with Assura on this exciting joint venture. As a long term investor, we believe that investing in important UK infrastructure and paying our members pensions are strongly aligned as these kinds of assets can provide inflation-linked income over many years.
Healthcare is a very important sector and we’re delighted to support investment in essential social infrastructure.”
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