Primary Health Properties delivers robust interims amid rental growth, Irish acquisition

Primary Health Properties (PHP), a leading investor in modern healthcare properties in the UK and Ireland, released its interim results for the six months to June 30, 2025, which showed its earnings grew amid an increase in rental income across its portfolio and after its Irish acquisition. 

PHP is London listed and secondary listed on the JSE.

Net rental income increased by 3.1% to £78.6 million (R1.4 billion).  Adjusted earnings per share  increased by 2.3% to 3.54 pence, headline earnings per share decreased by 5.9% % to 3.2 pence, earnings per share increased to 4.4 pence, while dividends per share increased by 2.9% to 3.55 pence.

PHP’s adjusted earnings increased by 2.2% to £47.3m in the reporting period, driven by organic rental growth from rent reviews and asset management projects, plus the acquisition of Laya Healthcare facility in February 2025.

PHP investment property portfolio valuation increased to £2.81bn from £2.75bn in December 2024. The portfolio’s metrics continue to reflect the group’s secure, long-term and predictable income stream with occupancy at 99.1%.

PHP said there was a pipeline of 43 asset management projects and lease regears planned over next two to three years, highlighting the improving rental growth outlook with the current weighted average rent of £195 per square meter (psm) due to increase by around 15% to £223psm post completion providing important evidence for future rent review settlements across the wider portfolio

Its acquisition of Laya Healthcare facility, Cork, Ireland for €22 million / £18.2m delivered an accretive earnings yield of 7.1%. The portfolio in Ireland now comprises 22 assets, valued at £293m. The portfolio in Ireland represents 10% (December 31,  2024: 9%) of the total portfolio and Ireland continues to represent a core part of the group’s strategy and preferred area of future growth

There was significant liquidity headroom with cash and collateralised undrawn loan facilities totaling £107.3m from £270.9m in December 31, 2024 after capital commitments and repayment of the £150m convertible bond post period end on July 15, 2025.

Mark Davies, the CEO of PHP, said, “At a pivotal time for our sector, PHP has delivered a strong operational and financial performance driven by rental growth across our portfolio, a value-accretive acquisition in Ireland, valuation gains and another period of dividend growth."

He said the improving rental growth outlook and a stabilisation of our property yields at 5.25% signal that the group had moved through a key inflexion point in the property cycle with a very encouraging outlook ahead.

“The 10-year Health Plan which was published on 3 July 2025 is clearly positive for PHP. We welcome the Government’s commitment to strengthening the NHS, particularly its emphasis on shifting more services to modern primary care facilities embedded in local communities. This plays directly to our strengths and our long-standing partnerships across the NHS give us a strong foundation to support this transition and deliver value to our shareholders," he said.

Talking about the recent takeover offer, he said PHP continues to believe in the compelling strategic and financial rationale for the recommended combination with Assura plc, saying that the transaction is expected to be earnings accretive for both sets of shareholders.

PHP had secured strong support for the transaction from PHP shareholders at its general meeting on July 12 with over 99% of voting shareholders approving the proposed combination.

Davies said this is a clear endorsement of the company’s ability to deliver a financially beneficial transaction that is strategically valuable, supported by an expected strong investment grade credit rating that will deliver future value to shareholders and underpin the droup's progressive dividend policy.

“Since the announcement of the Assura plc recommendation, we’ve continued discussions with third party investors on forming a joint venture, which is expected to include the private hospital portfolio, as part of our deleveraging strategy. Conversations are ongoing with a range of highly- credible investors and we remain confident in our ability to conclude a transaction in a timely manner post completion," he said. 

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