Assura, a UK healthcare REIT with a portfolio of more than 600 healthcare properties valued at around £2.7 bn (€3.17 bn) has orchestrated a 20:80 JV with pension investor, Universities Superannuation SchemeLimited (USS).
The pair announced the JV would target essential National Health Service (NHS) properties, which will add to USS’ existing total portfolio of £75 bn.
Initially lasting 20 years, the JV is being seeded with a portfolio of seven assets worth £107 mln from Assura’s existing portfolio at a small discount to the March 2024 valuation. The JV will add £250 mln over the next three years, with potential to grow to £400 mln after that focused exclusively on assets let directly to NHS or GP tenants with rents linked to inflation or with fixed uplifts.
Assura will retain a 20% equity interest in the JV and act as property and asset manager, receiving asset management fees linked to the valuation of the portfolio.
In a statement, the pair said: ‘This long-term partnership will support investment into essential NHS community healthcare buildings, which help to address the current backlog of patients waiting for care. As the population ages and more people live with chronic conditions, modern, flexible healthcare buildings are central to the NHS’s priority of delivering more care closer to patients.’
It is intended that the net cash proceeds of £85 mln will be recycled into Assura’s pipeline of acquisition and development opportunities across medical centres and broader healthcare markets.
Lazard acted as exclusive financial adviser to Assura.
Jonathan Murphy, CEO of Assura, said, ‘We are delighted to announce this exciting transaction with a high-quality and long-term capital partner in USS.’
‘This important transaction highlights the attractive investment characteristics in the healthcare sector and specifically the long term resilient cash flows generated by our assets.
Alex Turner, head of property at USS, said, ‘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.’
