Universities Superannuation Scheme and Assura have formed a £250m joint venture to support investment in NHS community healthcare buildings.
The joint venture has an initial term of 20 years and will be seeded with a £107m initial portfolio of seven properties, transferred from Assura’s existing portfolio at a small discount to March book values.
The joint venture is targeting acquisition-led growth to £250m over the next three years, with potential to grow to £400m thereafter. It will focus exclusively on assets let directly to NHS or GP tenants, with rents linked to inflation or with fixed uplifts.
Some £85m of net cash proceeds received will be recycled into Assura’s pipeline of acquisition and development opportunities across medical centres and broader healthcare markets.
Assura will retain a 20% equity interest in the partnership and act as property and asset manager, receiving asset management fees linked to the valuation of the portfolio.
The 20:80 partnership seeks to address a backlog of patients waiting for care. The jv said that as the population ages and more people live with chronic conditions, modern, flexible healthcare buildings are central to the NHS’s priority of delivering more care closer to patients.
Assura chief executive Jonathan Murphy said: “This important transaction highlights the attractive investment characteristics in the healthcare sector and specifically the long-term resilient cash flows generated by our assets.
“As well as demonstrating our ability to redeploy capital into our pipeline of opportunities in broader healthcare markets, we have sourced new capital that will fund investment in healthcare infrastructure that is so badly needed to enable better health outcomes.”
Alex Turner, head of property at USS, said: ” As a long-term investor, we believe that investing in important UK infrastructure and paying our members pensions are strongly aligned as these kinds of assets can provide inflation-linked income over many years.”
Lazard & Co acted as financial adviser to Assura.
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