Primary Health Properties (LSE:PHP) has entered a conditional agreement to form a 50:50 joint venture with GIC, a global institutional investor, to hold private hospital infrastructure, seeding the venture with 27 hospitals from its existing portfolio valued at approximately £0.7 billion.
The London-listed healthcare property investor expects completion in November and will receive net proceeds of approximately £0.5 billion, which it plans to use to repay variable rate debt, including what remains of the bridging facility used to acquire Assura in 2025.
PHP has been working toward this outcome since confirming in June that it was in advanced talks over its private hospital assets, with terms agreed by the time of its half-year results in July for a joint venture seeded with £0.7 billion of assets and targeted for completion this summer; the deal now disclosed, with GIC named as partner and November set as the completion month, represents that process reaching signature.
The seed portfolio transfers at a 5% discount to its 31 December 2025 book value, carries a weighted average unexpired lease term of 22 years and benefits from long-term, index-linked leases.
PHP will retain a 50% interest in the joint venture and continue as its property and asset manager, with net proceeds calculated after retained equity and deferred consideration of £47.5 million.
"The establishment of this joint venture with GIC marks an important strategic milestone for PHP," said chief executive Mark Davies, adding that the deal "enhances returns on invested equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure."
The company said the structure delivers deleveraging through debt repayment, earnings diversification via a new recurring management fee with potential performance-fee upside, and a strategic partnership combining PHP's healthcare real estate expertise with GIC's capital.
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- 24/06/26Primary Health Properties in advanced talks to form private hospital portfolio joint venture
Proceeds will go toward repaying and cancelling in full the acquisition bridging facility and a £266 million term loan, PHP said, which separately agreed an £800 million unsecured club facility in July as part of the same refinancing push.
On completion, PHP expects net debt to fall to approximately £2.9 billion at a weighted average interest rate of 3.6%, with net debt to EBITDA falling below 10 times, loan-to-value below 55% and government-backed income returning above 80% on a proforma basis, against a loan-to-value of 57% reported at the half-year following the Assura combination.
Completion remains conditional on finalising a new secured club debt facility, with key terms agreed with lenders and documentation ongoing; all property and commercial due diligence has been completed.