Primary Health Properties, the London-listed healthcare facilities investor, has entered a conditional agreement to form a 50-50 joint venture with GIC, Singapore’s sovereign wealth fund, to invest in private hospital infrastructure. The venture will be seeded with 27 private hospitals from PHP’s existing portfolio, valued at about 700 million pounds.
PHP expects net proceeds of about 500 million pounds on completion, which it will use to repay variable rate debt facilities, including debt linked to its acquisition of rival Assura. The company said the transaction would reduce its net debt to about 2.9 billion pounds from 3.4 billion pounds at June 30. PHP keeps a 50 percent stake in the hospitals and will earn recurring income as the venture’s property and asset manager, so it gives up half the economics rather than the assets themselves.
The deal follows discussions PHP disclosed in June with an unnamed investor about a joint venture over the private hospital portfolio. Completion is expected next month and remains conditional on finalising a new secured club debt facility for the venture, on which the company says all key terms have been agreed with lenders and documentation is under way. Property and commercial due diligence is complete.
For GIC, the venture is a direct route into UK private hospital real estate at portfolio scale. For PHP, it is the deleveraging mechanism the Assura deal required: sovereign capital absorbs half the asset base, the listed vehicle keeps management control and fee income, and the balance sheet, not the portfolio, is what shrinks.