Primary Health Properties, an investor in modern primary health facilities, has announced its interim results for the first half of 2020.

The real estate investment trust’s adjusted European Public Real Estate Association (EPRA) earnings per share increased by 7.1% to 3p, compared to 2.8p a year ago, and an average uplift of 2.2% per annum on rent reviews was completed in the period.

There was additional annualised rental income on a like-for-like basis of £0.9 million or 0.7%, from rent reviews and asset management projects, and the contracted annualised rent roll increased by 4.4% to £133.3 million.

A portfolio of 22 purpose-built medical centres were acquired, one of which was acquired on 1 July for £54 million. Three forward funded developments were also acquired in the half-year, with a net development cost of £23 million at Arklow in Ireland, Epsom and Llanbradach.

The property portfolio is now valued at £2.514 billion, up from £2.413 billion at the turn of the year, reflecting a net initial yield of 4.86%. A revaluation surplus was generated in the period of £10.5 million, representing growth of 0.4%.

The company’s Irish portfolio now comprises 17 assets, valued at £194 million, including two forward funded developments currently under construction which, if valued as complete, increases the total asset value to approximately £211 million.

PHP completed the forward funded developments at Athy, Bray and Rialto in Ireland during the period and has six developments currently on site with a net development cost of £41.5 million.

Harry Hyman, managing director of PHP, said: “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. The need for modern, integrated, local primary healthcare facilities is becoming ever more pressing in order to relieve the pressures being placed on hospitals and A&E departments.

“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.

“The successful equity placing on 9 July raised £140 million of proceeds and was upsized from £120 million due to strong investor demand. The funds raised will help further accelerate our growth by funding near-term portfolio expansion, forward funded developments and asset management projects.

“PHP looks forward to delivering further earnings and dividend growth and remains confident of its future outlook.”

*Sister companies of HealthInvestor UK have an interest in PHP

Date published: July 29, 2020

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