Assura is to acquire Northwest Healthcare Properties’ UK private hospital portfolio for c. €585m.
The portfolio includes 14 UK private hospitals with an average of 36 beds each. It has a rent roll of c. €34.4m, yield on cost of 5.9%, and day one rent cover of 2.3 times. The assets are mainly located in London and have an estimated rental value of €35.3m.
To finance this acquisition the company plans to issue c. €117m in shares to Northwest, refinance c. €311m of debt, draw down c. €93.6m from a credit facility, and use c. €63.2m of cash.
Jonathan Murphy, Assura's chief executive, commented: “The acquisition of Northwest’s high-quality UK private hospital portfolio accelerates the delivery of our broader healthcare strategy, securing increased exposure to the structurally supported private healthcare market as we continue to diversify our offering in line with UK healthcare demands. The acquired portfolio – with a long average lease length of 26 years and index-linked rent reviews – complements our existing assets and will benefit from our sector relationships, development and asset enhancement capabilities as the leading listed UK healthcare property investor and developer.
“Expected to be earnings accretive in the first full year, the transaction offers attractive financial benefits including sustainable long-term top-line growth to underpin a covered and progressive dividend policy. While the strength of our balance sheet has supported refinancing at an attractive rate, we intend to reduce our leverage in the next 18-24 months via a targeted disposal programme.
“The portfolio’s diversified occupier base, combined with our existing private occupier mix, means we now have relationships with all tier-one private healthcare providers. This represents a unique opportunity to participate in the growing demand for private healthcare services to help ease growing NHS waiting lists amidst the ongoing UK healthcare crisis.”
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