Primary Health Properties to slash debt after sealing £700m JV with GIC

(Sharecast News) - Healthcare infrastructure investor Primary Health Properties said on Monday that it had formed a 50:50 joint venture with GIC to invest in private hospital assets, a move that will release around £500m of cash and materially reduce group leverage. Primary Health said the JV will be seeded with 27 private hospitals from its existing portfolio, valued at roughly £700m and transferred at a 5% discount to the December 2025 book value. PHP will retain a 50% stake and act as property and asset manager, giving it ongoing fee income and exposure to long‑term, index‑linked leases with an average term of 22 years.

Completion was expected to take place in November, with net proceeds used to repay variable‑rate debt, including the remaining balance of its Assura acquisition bridging facility and a £266m term loan.

PHP said the transaction will cut net debt to about £2.9bn, lower its average interest rate to 3.6%, and reduce net debt‑to‑EBITDA to below 10x. Loan‑to‑value will fall under 55%, while government‑backed income will rise above 80%.

Chief executive Mark Davies said: "The establishment of this joint venture with GIC marks an important strategic milestone for PHP. In addition to generating proceeds to reduce our borrowings, the transaction enhances returns on invested equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure. Together, we are well positioned to capitalise on the significant structural growth opportunities in the private healthcare market."

As of 1045 BST, PHP shares were down 0.27% at 90.75p.







Reporting by Iain Gilbert at Sharecast.com

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