PHP acquires 14 care properties in EUR 47m deal

UK specialist REIT Primary Health Properties has unconditionally agreed to acquire the entire issued share capital of Health Investments (HI), a provider of primary care and pharmacy properties with a UK wide portfolio.

The consideration payable of £11.7 mln is to be satisfied by the issue to the vendor of one million PHP shares amounting to £2.9 mln with the remainder being paid in cash.

In addition to the consideration payable, HI has approximately £28.1 mln of debt which, net of a mark-to-market adjustment of £900,000, has been assumed by PHP as part of the acquisition. The assumed debt has a weighted life of approximately 19 years. The HI debt assumed will be incremental to the group's existing debt facilities. The combined enterprise value of the assets being purchased, including the Consideration Shares, cash paid and assumed debt is £39 mln (EUR 47 mln).

HI owns 14 primary care properties which have an appraised valuation of £39 mln. The current rent roll equates to £2.4 mln, reflecting a net initial yield of 6.1%. The portfolio is 100% let to General Practitioners, Primary Care Trusts, NHS bodies and pharmacy operators with the weighted average lease lengths in excess of 19 years.

Rental income is derived 91% from the NHS with the remainder from strong covenant pharmacy operators. The properties are located primarily in the south east of England.