13th Jun 2014 08:46
LONDON (Alliance News) - Assura Group Ltd Friday said it has bought 28 medical centres for GBP107 million in cash, shares and assumed debt, a deal that will boost earnings immediately.
The real estate investment trust and primary care property investor said it will pay Ray Seymour and Alistair Blacklaws, the founders of the MP Realty Holdings Group, GBP10 million in cash and issue them with 44.3 million new shares for the medical centres. Assura will also assume 77.7 million in net debt.
The 28 medical centres have on average a lot size of £3.9 million, an unexpired lease term of 15 years and are under 10 years old, it said. Assura's medical centre portfolio now stands at 230 primary care medical centres with a contracted passing rent of GBP46.3 million.
The current passing rent of GBP6 million from the newly acquired centres adds 15% to the company's rent roll.
Rent reviews for some of the medical centres remain unsettled, and it is expecting uplifts of GBP0.2 million on rent reviews dating back to 2009. Once the outstanding rent reviews are settled, annual rents will be approximately GBP6.2 million, which represents a yield on the gross consideration of 5.8%. 90% of this income is contracted to General Practitioners or National Health Service bodies.
Interest costs on the long-term debt it is assuming is GBP4.2 million a year. The debt has an average fixed interest rate of 5.5% and an average maturity of 13.5 years.
"On consolidation there will be fair value adjustments, primarily to reflect current market interest rates for long-term borrowings, and hence these are expected to lower interest charges and increase underlying profitability by a further GBP0.1 million per annum," it said in a statement.
"The acquired portfolio has been carefully constructed and managed over many years and represents a very good fit with our existing strong and growing portfolio. Ray and Alistair's approach to quality of design and construction and ongoing support for their GP occupiers mirrors our own philosophy and we look forward to providing continued support to their occupiers in the future," Assura Chief Executive Graham Roberts said in a statement.
Assura is trying to build scale, and the deal comes after it bought 32 medical centres last September.
"Both acquisitions benefit from our internally managed model where significant growth in our portfolio requires only marginal increases in overheads," Roberts said.
Assura shares were up 0.6% at 43 pence Friday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Assura