Primary Health Properties PLC (LSE:PHP, OTC:PHPRF) today announced that from January to September 2023, the group generated an additional £3.3 million in rental income from its rent review and asset-management activities in the UK and Ireland, marking an increase from £2.4 million in the same period of 2022.
The company's rental growth outlook continues to improve, especially from rent reviews, with an additional £3.1 million in income from 243 settled reviews, a 9.6% increase over the previous rent.
Looking ahead, Primary Health is on track to exceed £4 million in extra income from rent reviews this year, influenced by inflation's impact on indexed-linked and open market value reviews.
The company is also set to acquire an Enhanced Community Care facility in Ballincollig, near Cork, Ireland, for €29.6 million.
This property, fully leased to the Health Service Executive for 25 years, will be managed by Axis Technical Services, increasing Primary Health's portfolio to 514 assets.
With this acquisition, the contracted rent roll will approach £150 million.
As of September 2023, the Group's net debt was £1,28 million, a slight increase from £1,27 million in June 2023. The loan-to-value ratio stood at 45.8%, with £282 million of undrawn loan facilities available.
On October 5, Primary Health declared its fourth quarterly interim dividend of 1.675p per Ordinary Share, payable on November 24 to shareholders registered as of October 13.
This dividend, comprising a property income distribution of 1.34 pence and a regular dividend of 0.335 pence, equates to 6.7p annually, a 3.1% increase from the 6.5p paid in 2022.
Commenting on the state of the rental market, chief executive Harry Hyman stated: "The increasingly firmer tone of rental growth is positive and we believe in the medium term that PHP will be a beneficiary of the current inflationary environment both through open market and index-linked reviews.
"Future rental growth will be key to underpinning both the operational performance and valuation of the group's portfolio in the ongoing turbulent economic and interest rate outlook caused by both global and domestic events.
Primary Health lists in South Africa
Primary Health also announced a secondary listing on the Johannesburg Stock Exchange.
Per today’s RNS, the board “believes that the secondary listing will contribute to liquidity in the group's shares as a result of the growing interest in the company and its increased profile in the South African market, where a number of investors have already shown strong interest in the unique healthcare property investment opportunity”.
"We are delighted that PHP's shares have started trading on the South African JSE today and are pleased by the positive reception from the investors we have met so far,” said Hyman.
“This is a significant milestone that demonstrates the international attraction of PHP's equity story as we grow and become a global healthcare investment opportunity.”