Rental growth ahead of guidance, says Primary Health Properties

(Sharecast News) - Primary Health Properties said on Thursday that rental growth remained ahead of target in the third quarter, while planned joint-venture transactions aimed at reducing leverage were progressing as expected.

In a third-quarter update, the healthcare property investor said it generated an additional £5.8m of rental income from 480 completed reviews in the first nine months of the year, representing a 6.1% increase on the previous £96m of rent.

On an annualised basis, rental growth was 3.1%, slightly ahead of its target of more than 3%. Growth was 2.8% across its UK primary-care portfolio and 3.7% in both private hospitals and Ireland.

Chief executive Mark Davies said PHP continued to deliver rental growth "slightly ahead of our guidance", adding that recent investment transactions in the sector had taken place at supportive valuations.

PHP also said its previously announced joint-venture transactions remained on track, with financial terms agreed and due diligence completed. Proceeds from asset sales into the ventures will be used to reduce debt, with the group targeting net debt-to-EBITDA of below 9.5 times and a loan-to-value ratio below 50%.

Elsewhere, PHP said it had completed the integration of Assura and now expected to deliver financial synergies ahead of plan.

The company has five new-build developments under construction across the UK and Ireland, all of which remain on time and on budget, while a £6.5m extension to Tees Valley Hospital started on site during the quarter.

PHP shares were down 0.2% at 91.5p by 1303 BST.

See the latest RNS on Sharecast.