Monday, 19 October 2026
Singaporean institutional investor GIC has agreed to partner with Primary Health Properties (PHP) in a £700 million transaction involving 27 private hospitals in the United Kingdom. The agreement will enable the British healthcare property investor to release approximately £500 million from its existing assets, helping reduce debt following its acquisition of Assura in 2025.
The proposed partnership will be equally owned by GIC and PHP, with the hospitals transferred from PHP’s existing portfolio into a newly established investment vehicle. The properties will be valued at approximately 5% below their December 2025 book value. Completion is expected in November 2026, subject to the finalisation of financing arrangements.
The transaction represents an important step in PHP’s efforts to strengthen its financial position following the Assura acquisition. Proceeds will be used to repay outstanding acquisition financing, including a £266 million term loan. Once completed, the arrangement is expected to reduce the company’s net debt from approximately £3.4 billion to £2.9 billion, while bringing its loan-to-value ratio below 55%.
The hospitals included in the agreement have an average remaining lease duration of 22 years, with rental payments linked to inflation. These characteristics provide investors with visibility over future income and exposure to healthcare facilities that serve an established medical market. However, the performance of the portfolio will continue to depend on the financial stability of hospital operators and the demand for private healthcare services.
PHP will retain half of the investment vehicle and continue overseeing the properties, generating management fees alongside income from its ownership interest. The arrangement also provides scope for additional earnings linked to investment performance. For GIC, the partnership offers an established portfolio of specialist healthcare properties without requiring the investor to establish its own management operations in the UK.
The agreement follows a period of expansion for PHP, particularly its acquisition of Assura, which increased the scale of its healthcare property holdings and associated borrowing. Introducing an institutional partner allows the company to recover capital from existing investments while maintaining exposure to their future performance. The transaction also reduces the amount of debt carried directly by the group.
Following completion, PHP expects its average borrowing cost to be approximately 3.6%, with net debt relative to annual operating earnings falling below ten times. The company also anticipates that more than 80% of its rental income will once again come from government-supported sources, reflecting the change in the composition of its directly held portfolio.
The partnership highlights the continued role of institutional capital in specialist property sectors where long leases and established tenants can support investment strategies extending over several decades. Healthcare real estate offers these characteristics, although property valuations, operating costs and tenant financial performance remain important considerations.
Both partners have indicated that the investment platform could accommodate additional hospital properties in the future. However, no further acquisitions or construction projects have been confirmed, and the immediate priority remains completing the initial transaction.
The agreement is conditional on finalising a secured lending arrangement, with the principal commercial terms already settled and property due diligence completed. If concluded as anticipated in November, the transaction will provide PHP with additional financial flexibility while giving GIC a substantial position in the UK’s private hospital property market.
