Primary Health Properties (PHP) saw a strong performance from its UK health infrastructure assets in the three months to March 31, 2026, the first quarter of its financial year.
Image: Independent Media
Primary Health Properties, the London and JSE-listed investor in UK health infrastructure, saw a strong start in its first quarter of 2026 and is expanding into the UK’s rollout of Neighbourhood Health Centres (NHC).
The UK Department of Health and Social Care announced the first wave of NHC's at the end of March 2026, three of which were Primary Health Care assets.
NHCs are intended to improve patient access, bringing additional health services closer to people's homes and providing a wider range of services in the community.
The initial wave provides investment in existing buildings to increase capacity, and “we will work with the NHS to deliver these development and asset management opportunities,” Primary Health Properties CEO Mark Davies said in a first quarter trading update on Wednesday.
The full NHC program targets delivery of 250 centres by 2035, and the company is working with the NHS and the UK government on future opportunities.
“PHP is on site with six development schemes: two UK primary care centres within the existing joint venture with USS, three schemes in Ireland, and one private hospital. All schemes remain on track for completion during 2026 and 2027 and to deliver attractive returns,” said Davies.
He said they continue to monitor a number of potential development opportunities with a pipeline across primary care in both the UK and Ireland and private hospitals.
“These will only be progressed if accretive to earnings and they deliver the appropriate risk-adjusted returns to shareholders,” said Davies.
Meanwhile, on March 11, 2026, a second quarterly interim dividend of 1,825 pence per share was declared by way of a property income distribution of 1,325 pence and a normal dividend of 0.5 pence. The dividend represented a 2,8% increase over dividends paid in 2025 annualised and marked the 30th year of consecutive dividend growth for the company.
In the three months to March 31, organic rental growth from the enlarged portfolio's rent reviews had delivered an extra £3 million of income, an increase of 6% or 3,4% on an annualised basis (up from 3,2% in 2025).
"We have continued to make excellent progress on the delivery of the post-Assura combination objectives since we announced PHP's latest results in March,” Davies commented.
These include reducing leverage back to the target range of 40% to 50%, net debt/EBITDA below 9,5 times, delivering £9m of annualised cost savings synergies, and integrating the two businesses, all of which the company expects to complete ahead of schedule.
“We have made considerable progress in the period in establishing a new vehicle for our private hospital portfolio," said Davies.
The company continued to believe the rental growth outlook would improve further, especially from rent reviews, with the extra £3m of income in the quarter generated from 199 completed reviews.
This represented a total 6% increase over the previous rent of £54m, equivalent to 3,4% (2025: 3,2%) annualised.
All parts of the enlarged portfolio were performing well, with Primary Care UK at +2,9%, Private Hospitals at +3,7%, and Ireland at +4,4%.
“We continue to see opportunities to drive more growth and efficiencies, and the annualised contracted rent roll now stands at £345m (£342m),” said Davies.
Progress had been made in establishing a new vehicle for the private hospital portfolio and plans to deliver a transaction that will reduce gearing and act as an alternative source of capital and growth were on track.
“A shortlist of potential counterparties is engaged… We are confident that a transaction will be announced during the summer of 2026,” said Davies.
The transfer of a further £103m of assets into the existing primary care joint venture was progressing through legal due diligence, and this was expected to be complete on schedule before the end of July 2026.
Good progress was also being made on the £9m cost-saving target. To date, £7,8m of annualised cost-saving synergies, or 87% of the target, had been delivered.
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