Primary Health Properties PLC Acquisition of Primary Health Care Centres (3459I)

TIDMPHP

RNS Number : 3459I

Primary Health Properties PLC

02 July 2013

2 July 2013

Primary Health Properties PLC

Acquisition of Primary Health Care Centres Limited

Primary Health Properties PLC ("PHP"), the UK's leading investor in modern primary healthcare facilities, announces that it has unconditionally agreed to acquire the entire issued share capital of Primary Health Care Centres Limited ("PHCC"), an investor in primary care and pharmacy properties in the UK.

   -- Consideration payable of approximately GBP10.5 million, including transaction costs of GBP0.3 million to be 
      settled in cash upon completion 
   -- High quality portfolio of 11 standing fully let primary care properties across the UK 
   -- Total rent roll on completion of GBP1.7 million, reflecting a net initial yield on actual acquisition cost of 6.2 
      per cent 
 
   -- A weighted average lease length of 19.3 years 
 
   -- Assumption of fixed cost debt of GBP17.8 million and net cash balances of GBP1.5m 
   -- PHP's portfolio increases to 197 primary care assets with a contracted rent roll of GBP41.3 million

PHCC owns 11 primary care properties, all of which are completed and fully let generating a rent roll of GBP1.7 million. The assets have been acquired at a total cost of GBP26.8 million, including transaction costs, reflecting a net initial yield to PHP of 6.2 per cent.

This portfolio is let to General Practitioners, NHS bodies and pharmacy operators with a weighted average lease length remaining of 19.3 years. Rental income is derived 97% directly or indirectly from the NHS with the remainder largely from pharmacy operators. The properties are located across mainland UK.

In addition to the consideration payable, PHP will assume PHCC's GBP17.8 million of fixed cost debt. The assumed debt has a weighted life of approximately 13.8 years and will be incremental to the Group's existing debt facilities.

PHP will look to re-set or refinance this debt at the earliest opportunity to lock in to current low interest rates available in the market. Allowance has been made by the vendor within the purchase price for a proportion of the cost of repaying the underlying loans.

PHP believes that the acquisition adds high quality assets to its existing portfolio and increases its recurring income surplus which will reduce the proportion of its current dividend that is partially uncovered by earnings. With the acquisition of PHCC, PHP has now acquired or committed to acquire 16 assets in 2013 for a total of GBP46.3 million. Following completion, PHP's portfolio now comprises 197 primary care properties with a total contracted rent roll of GBP41.3 million.

Harry Hyman, Managing Director of PHP, said:

"We are delighted to complete the acquisition of this strong portfolio with its long term, secure rental stream. This further demonstrates our ability to quickly invest the proceeds of our recent GBP68.5 million equity issue into transactions that are accretive to PHPs rental profits in line with management's aim of returning to full dividend cover at the earliest opportunity."

More information on Primary Health Properties PLC can be found on www.phpgroup.co.uk

For further information please contact:

 
Harry Hyman                 Phil Holland 
 Managing Director           Deputy Managing Director 
 Primary Health Properties   Nexus TradeCo Limited 
 PLC                         Tel: 020 7451 7050 
 Tel: 020 7451 7050 
Tim Walker-Arnott           David Rydell / Victoria Geoghegan / 
 Property Director           Elizabeth Snow 
 Nexus TradeCo Limited       Pelham Bell Pottinger 
 Tel: 01483 749033           Tel: 0207 861 3821

This information is provided by RNS

The company news service from the London Stock Exchange

END

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