Primary Health Properties PLC ( LSE:PHP , OTC:PHPRF ) has agreed to form a 50:50 joint venture with Singapore sovereign wealth fund GIC, seeding the partnership with 27 private hospitals valued at around £700 million.
The FTSE 250 healthcare property investor expects to receive net proceeds of approximately £500 million when the transaction completes in November, with the cash earmarked for debt reduction following its acquisition of Assura in 2025.
The portfolio will be transferred at a 5% discount to its 31 December 2025 book value and has a weighted average unexpired lease term of 22 years, supported by long-term index-linked leases.
Primary Health Properties will retain a 50% interest in the joint venture and will act as property and asset manager, creating an additional recurring management fee income stream with potential performance fees.
The company said proceeds will be used to repay and cancel its acquisition bridging facility and a £266 million term loan.
Following completion, net debt is expected to fall to around £2.9 billion, while loan-to-value is forecast to decline below 55% and net debt to earnings before interest, tax, depreciation and amortisation to fall below 10 times.
The proportion of income backed by government counterparties is also expected to rise above 80%.
Chief executive Mark Davies said 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.
Completion remains conditional on finalising a new secured club debt facility, with all key terms agreed and documentation underway.
