Primary Health Properties (LSE:PHP) said rental growth across its UK and Ireland healthcare property portfolio is running slightly ahead of guidance, with 480 completed rent reviews generating an extra £5.8 million of annualised income in the first nine months of the year.
That represents a 6.1% uplift on the previous rent roll of £96 million, equivalent to 3.1% on an annualised basis against the company's own target of more than 3%, with Primary Care UK up 2.8%, Private Hospitals up 3.7% and Ireland up 3.7%.
The update comes two months after PHP agreed exclusive terms for a 50/50 joint venture with a global institutional investor, seeded with £0.7 billion of private hospital assets and targeted for completion over the summer, alongside a separate deal to transfer £103 million of assets into its existing primary care joint venture with USS for expected net proceeds of £82 million.
PHP said both transactions have progressed since its interim results in late July, with financial terms now agreed and due diligence complete, though it stopped short of naming the private hospital JV partner or confirming a completion date, promising a further update shortly.
"We remain focused on completing the previously announced deleveraging plan and we are pleased to report that key transactions with our joint venture partners remain on track," said chief executive Mark Davies.
Proceeds from the asset sales into the joint ventures will be used to pay down debt, with the company targeting net debt to EBITDA below 9.5 times and loan-to-value below 50%, against a loan-to-value of 57% reported at the half-year following the Assura combination.
PHP said it has completed the integration of Assura during the period and now expects to deliver financial synergies ahead of plan.
On the development side, the company is on site with five new build projects across the UK and Ireland, all tracking on time and on budget, alongside recently completed asset management work at its Wakefield and Yeovil sites and a £6.5 million extension at Tees Valley Hospital in Middlesbrough that has moved on site this quarter.
PHP flagged a growing pipeline of risk-controlled development opportunities tied to the government's Neighbourhood Health Centre programme, including a strategic partnership with East of England Ambulance Service Trust for new ambulance hubs, expected to be funded through the existing primary care joint venture.