Primary Health Properties PLC on Wednesday backed an improved growth outlook, after reporting a rise in quarterly rental income.
In the first quarter of 2023, the London-based healthcare facility investor said it generated an additional £1.3 million of extra rental income on a like-for-like basis from its rent review and asset management activities.
It added that it continues to see an ‘improving’ rental growth outlook, especially from rent reviews. It noted that rent reviews generates an extra £1.2 million of income in the quarter from 101 reviews that have been settled.
Over the course of 2023, Primary Health Properties expects rent reviews to generate £4.0 million of extra income, driven by the impact of inflation on both indexed-linked and open market value reviews.
Back in January, Primary Health Properties PLC said it had acquired Axis Technical Services Ltd, strengthening its position in Ireland. Axis Technical Services is a Cork, Ireland-based property manager, currently responsible for over 30 properties, including most of Primary health’s Irish portfolio.
Since the acquisition, the company said Axis has performed in line with management’s expectations and PHP has successfully migrated all asset and property management activities in Ireland to the Axis team.
‘The group continues to adopt a very disciplined approach to further investment and development activity, which will only take place if accretive to earnings. Future pipeline of opportunities continues to be focused predominantly on Ireland and PHP’s existing portfolio through asset management projects,’ Primary Health Properties noted.
The company’s net debt at March 31 was virtually unchanged year-on-year at £1.27 billion. It has £321 million of undrawn loan facilities available, net of capital commitments.
Chief Executive Officer Harry Hyman said: ‘We continue to focus on income growth from our existing portfolio and are encouraged by the growth seen in the first quarter of the year. Furthermore, with the majority of PHP’s debt either fixed or hedged, a strong control on costs, a disciplined approach to capital deployment and just one development on site we have limited exposure to further cost increases and development risk.’
Shares in Primary Health Properties were down 1.0% to 104.20 pence each in London on Wednesday morning. Over the past 12-months, the stock is down 31%.
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