Primary Health Properties PLC has agreed to create a 50:50 joint venture with Singapore’s sovereign wealth fund GIC, transferring 27 private hospitals into the new vehicle in a move designed to reduce borrowing and strengthen its balance sheet.
Deal details and financial impact
The healthcare property investor said the portfolio being contributed is valued at around £700 million and will be transferred at a 5 per cent discount to its 31 December 2025 book value. The company expects to receive about £500 million in net proceeds when the transaction completes in November.
Those proceeds are intended primarily to repay acquisition-related facilities. The company said the cash will be used to settle and cancel its bridging facility for the Assura acquisition and a separate £266 million term loan.
| Metric | Figure |
|---|---|
| Portfolio value | £700 million |
| Expected net proceeds | £500 million |
| Term loan to be repaid | £266 million |
| Weighted average unexpired lease term | 22 years |
What the company says
Primary Health Properties will retain a 50 per cent ownership stake and will continue to act as property and asset manager for the joint venture. That role will generate recurring management fees and the potential for performance-related payments.
“The deal would reduce borrowings, improve returns on invested equity and give the company a long-term institutional partner to help fund further investment in UK hospital infrastructure.”
The company emphasised that the portfolio’s leases are long dated and indexed, with a weighted average unexpired lease term of 22 years. It also signalled an increase in the proportion of income underpinned by government counterparties to above 80 per cent following completion.
Balance-sheet consequences
On completion, Primary Health Properties forecasts net debt will fall to around £2.9 billion. It expects loan-to-value to dip below 55 per cent and net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) to decline to under 10 times.
- The transferred portfolio comprises 27 private hospitals.
- Assets are being transferred at a 5% discount to year-end 2025 book value.
- Completion is conditional on finalising a secured club debt facility, with key terms reportedly agreed and documentation underway.
Completion remains conditional on finalising a new secured club debt facility. The company said all key terms have been agreed and documentation is in progress.
Context and implications
The transaction follows Primary Health Properties’ acquisition of Assura in 2025, an acquisition that required bridging finance. By carving out a sizeable hospital portfolio and bringing in an institutional partner, the company is aiming to de-leverage and create capacity for further investments in health facilities.
For the wider health sector, the deal illustrates how private capital and sovereign investors are increasingly active in financing healthcare real estate. Retaining management responsibility allows the investor to continue overseeing operations while realising liquidity and risk sharing with a global partner.
Investors and health-system observers will watch the closing of the club debt facility and the extent to which the transaction achieves the stated objectives of lowering gearing and improving returns on invested equity. The increased share of income backed by government counterparties may also be viewed as strengthening income security for the asset pool.
As the transaction proceeds to completion in November, details such as the exact terms of management fees and any performance fee arrangements will be material to assessing the long-term economics for Primary Health Properties and its new partner.
These developments are relevant to policymakers and hospital operators who monitor how capital flows and ownership structures affect funding and stewardship of health infrastructure.
