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Assura plc (LSE:AGR), a leading UK healthcare property investor and developer, has announced a major expansion into the private healthcare sector with the acquisition of a fully operational UK private hospital portfolio from Northwest Healthcare Properties. The deal, valued at £500 million, marks a significant strategic move for Assura as it continues to diversify and strengthen its position in the healthcare real estate market.
Strategic Acquisition Details
The acquisition involves 14 high-quality hospital assets located across the UK, with a significant concentration in London, which accounts for 64% of the portfolio based on current rental income. The portfolio, which features a total of 504 registered beds, has been acquired through a combination of cash, shares, and debt. The transaction includes the issuance of approximately 245 million consideration shares, valued at around £100 million, to Northwest Healthcare, alongside £266 million of refinanced debt through a new term loan, and £134 million in cash, which was partially funded by drawing down on Assura’s existing revolving credit facility.
This acquisition is a strategic fit for Assura, aligning with its long-term growth objectives and its expertise in healthcare infrastructure. By acquiring these operational assets, Assura significantly accelerates its strategy to diversify into new sectors at scale, particularly in the private healthcare market. The portfolio brings with it strong financial benefits, including an enhancement of earnings, a long-term secure income stream with index-linked rent reviews, and support for Assura’s progressive dividend policy.
Portfolio Overview and Financial Impact
The newly acquired portfolio consists of 14 private hospitals, each with an average lease length of 26 years, generating an annual rent roll of £29.4 million. The yield on cost stands at a robust 5.9%, with a day-one rent cover of 2.3 times. These hospitals are primarily tenanted by top-tier private operators such as Nuffield Health, Circle, and Spire, with 92% of the assets rated 'Good' or 'Outstanding' by the Care Quality Commission (CQC).
In terms of financial performance, the acquisition is expected to be earnings accretive in the first full year, with significant potential for future growth. The Group’s proforma rent roll will increase by approximately 20% to £179 million, and the weighted average unexpired lease term (WAULT) across the portfolio will extend from 10.8 years to 13.0 years. Furthermore, the acquisition will enhance Assura’s financial profile, with the Group’s loan-to-value (LTV) ratio expected to remain within its policy range of 40-50%.
Strategic Rationale and Future Growth
Assura’s acquisition of this private hospital portfolio reflects its confidence in the structurally supported private healthcare market in the UK, which is experiencing growing demand across private medical insurance (PMI), self-pay, and NHS-referred services. The addition of these assets allows Assura to strengthen its relationships with key healthcare providers and solidify its position as the leading listed UK healthcare property investor.
Moreover, the acquisition aligns with Assura’s commitment to social impact and sustainability. The portfolio offers opportunities for asset enhancement, including extensions and sustainability upgrades, which will further support Assura’s goal of generating attractive financial and social returns for its shareholders and wider stakeholders.
