Disposals put ‘attractive investment’ Assura on track to achieve financial targets
Altrincham-based healthcare property group, Assura, could potentially raise £248m through disposals and achieve its target to hit its goal of net debt to EBITDA below nine times and a loan to value below 45% over the next 18 months.
In a third quarter trading update to December 31, 2024, it revealed it has, so far raised, £48.4m in disposals, with talks under way for another £110m, and a £90m further pipeline identified for potential disposal.
Chief executive, Jonathan Murphy, provided the update today which also revealed positive progress on rent reviews, with 59 settled in the quarter, covering £8.5m of existing rent and generating an uplift of £0.6m (7.2% uplift on previous passing rent).
He said the group is well positioned to take advantage of the strong growth in the UK private hospitals market with early discussions under way on several asset enhancement opportunities on existing sites and a growing pipeline of further development opportunities.
The group is currently on site with five developments with a total cost of £44m, with £22m remaining to be spent.
And he says Assura enjoys a ‘strong and sustainable financial position”.
Its portfolio now stands at 608 properties with an annualised rent roll of £176.9m (September 2024: £179.1m).
Net debt has been reduced by £46m with disposal proceeds used to reduce the drawn revolving credit facility.
Its A- rating was reaffirmed by Fitch in August following its private hospital portfolio acquisition.
Net debt stands at £1,529m (September 2024: £1,575m) on a fully unsecured basis with cash and undrawn facilities of £190m.
He said: “We have maintained momentum in the third quarter continuing to deliver against our strategic objectives.
“The recently acquired 14 private hospitals are now fully embedded into our portfolio and are performing as we anticipated.
“Our asset disposal programme, announced at the time of our private hospital acquisition, raised £48m during the period and active discussions are under way on a further £110m.
“We are on track to hit our target net debt to EBITDA below nine times and LTV below 45% over the next 12 to 18 months.”
He added: “There is ongoing national recognition that improved health outcomes can be delivered by investment in community healthcare and through utilising capacity within the private sector.
“We have seen this recognition backed up by policy actions: £900m of funding for GPs announced in December; an additional £100m of committed investment to upgrade the GP estate; and this month a new partnership agreement between NHS England and the independent sector to work together for the benefit of patients.
“Assura is uniquely positioned to support this shift through the delivery of high quality, modern and sustainable facilities.”
He concluded: “As the UK’s leading diversified healthcare REIT, our progress in the third quarter, and a dividend yield of over nine per cent, strengthens our position as an attractive long term investment that is underpinned by stable trends in the UK healthcare sector.”
