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UK health centre developer PHP plans to raise £120m

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Facility: A rendering of the healthcare centre in Athy, Co Kildare

Facility: A rendering of the healthcare centre in Athy, Co Kildare

Facility: A rendering of the healthcare centre in Athy, Co Kildare

PRIMARY Health Properties, the UK company that owns 15 operational healthcare centres in Ireland, is planning to raise £120m (€134m) via a share placing to fuel expansion.

It said it continues to see opportunities for funding new developments in Ireland and the UK.

The company has been very active in the Irish market, and has two healthcare centres under construction here. The 17 centres that will comprise its portfolio in Ireland when those two projects are completed are expected to have a total asset value of €233m.

It completed three facilities here during the first half of the year- at Rialto in Dublin, Bray in Co Wicklow and Athy in Co Kildare.

Primary Health Properties (PHP) told investors that it currently has a short-term pipeline of 11 new developments to be forward funded, totalling £92m (€103m). Of that total, £44m is earmarked for Ireland.

"The directors believe these transactions to be very attractive for PHP as they typically involve the development of larger medical centres that house bigger GP practices providing a more integrated healthcare offering in line with PHP's stated strategy of focusing on hub primary care centres," PHP told investors.

The company said it has a pipeline of over 80 incremental asset management projects which have either been approved by the board or are in advanced negotiations.

The pipeline of projects equates to investing approximately £36m (€40m)  in 2020 and 2021, generating £1.1m of additional income and extending the weighted average unexpired term on those leases to 21 years.

PHP said that the impact of the Covid-19 pandemic coupled with the healthcare demands of an ageing and growing population "strongly underpins" the need for modern, integrated and local primary healthcare facilities that can help relieve pressure on hospitals and emergency departments.

The share placing will help to maintain what PHP said is an appropriate loan-to-value ratio, reducing it in the short term from 45.8pc to 41pc on a pro-forma basis. The group's net debt was £1.15bn (€1.28bn) at the end of June.

In a trading update yesterday, the group said its operational and financial performance to date "remains strong", and that its portfolio continues to demonstrate "good resilience" despite the uncertainty caused by the pandemic. 

"The Covid-19 pandemic has highlighted the demands on health systems around the world, not least the NHS in the UK and HSE in Ireland, where the underlying demand for healthcare is increasingly driven by growing and ageing populations," said managing director Harry Hyman.

"As a result of the Covid-19 pandemic, we see strong demand for extra space to help alleviate the backlog of consultations that has arisen as a result of the coronavirus, while facilitating the movement of activity out of hospitals and the continued care of patients that have suffered from Covid-19," he said.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Irish Independent