Primary Health Properties has sold half of its private hospital portfolio to Singapore’s sovereign wealth fund, GIC, in a £700 million transaction aimed at reducing debt following last year’s acquisition of Assura. The arrangement establishes a 50:50 joint venture responsible for overseeing 27 hospitals, which were transferred at a 5% discount relative to their 2025 book value.
The investment is structured as a long-term commitment, with the hospitals supported by 22-year leases that include inflation-linked adjustments. The deal is scheduled for finalization in November 2026, with PHP anticipating net proceeds of approximately £500 million. These funds will be used to settle variable-rate debt, including the outstanding £260 million portion of a £1.2 billion bridging loan that helped finance the Assura acquisition.
For the company, this transaction reduces net debt from £3.4 billion to £2.9 billion, aligning its loan-to-value ratio more closely with its target range of 40–50%. PHP will maintain a 50% ownership in the joint venture and continue as the property manager, ensuring a steady stream of management fees. CEO Mark Davies described the partnership as a means to enhance returns while securing institutional support for future hospital investments across the UK.
This development follows a period of discussions with potential buyers. Earlier in the year, PHP disclosed receiving proposals from four interested parties before entering exclusive negotiations with GIC. In addition, the company transferred £103 million in assets to its primary care joint venture with USS, generating £82 million in proceeds. Despite these adjustments, the core business remains robust, with adjusted earnings per share rising 9% in the first half and rental income outpacing projections.
The company has set a target for a fully covered 2026 dividend of 7.3p, extending its streak of consecutive dividend increases to 30 years. PHP also plans to pursue an investment-grade credit rating from Fitch once the transaction is finalized, further solidifying its financial standing.
