Financial markets have keen appetite for primary care investment properties

Primary Health Properties’ retail bond issue raises £75m

Despite the cautiously optimistic economic news this week, many of the GPs and medical practitioners we speak to remain convinced that the value of their premises is at best flat-lining or at worst, falling.

Yet, this is in fact not the case.

There is ongoing competition from primary health property companies (such as Assura, Ashley House, Primary Health Properties and Medix) for good quality investments, particularly with the shortage of new development schemes due to funding cutbacks.

The success of the recent (over-subscribed) retail bond issue by Primary Health Properties Plc to raise £75m with an effective interest return of 5.4% shows there is an appetite in the financial markets to fund further primary care investment property.

Yields are definitely holding firm and we’re seeing a widening gulf between the yields being achieved on this type of investment as against the wider commercial secondary market, where particularly in the provinces yields continue to move out as worries continue about security of income and the lack of future rental growth prospects.

Substantial funds are still available from private investors looking for a secure home and this type of investment, with long leases backed by effectively government support, are offering attractive yields of 5.5 – 7% depending on the quality of the property and its location.

About Neil

Neil has been a Chartered Surveyor at local, regional and national levels for the past forty years. The health care sector is now a substantial part of his advisory work. Outside the office (when he can manage to escape), he can be found on the golf course or following Leicester City FC's rollercoaster ride each season!


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