Primary Health Properties (PHP) has agreed a conditional 50:50 joint venture with sovereign wealth fund GIC to invest £700m in private hospital infrastructure.
The agreement seeds 27 private hospitals from the REIT’s portfolio into the new venture, with completion expected in November 2026.
PHP will receive net cash proceeds of £500m to repay floating-rate debt facilities. The debt includes the remaining balance of a bridging facility used to acquire Assura in 2025.
The seed portfolio transfers at a 5% discount to its 31 December 2025 book value. PHP will retain a 50% interest and act as property and asset manager.
Following completion, net debt at PHP will fall to £2.9bn, with a weighted average interest rate of 3.6%. The company targets an investment grade credit rating of BBB+ or above. Rothschild and Co acted as sole financial adviser to PHP.
Mark Davies, chief executive of PHP, said: “The establishment of this joint venture with GIC marks an important strategic milestone for PHP. In addition to generating proceeds to reduce our borrowings, the transaction enhances return on equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure.
“Together, we are well positioned to capitalise on the significant structural growth opportunities in the private healthcare market. PHP is delighted to have GIC as a partner and is excited about the opportunity to grow this platform in the future.”
