Primary Health Properties has said its first quarter was characterised by “a lack of suitable product, strong pricing and a very competitive market” resulting in just one property acquisition so far this year.
The landlord bought the Shankhill Primary Care Centre in Ireland for €3.8m in March.
PHP said that, excluding direct developments, it has grown its pipeline of potential acquisitions in the UK and Ireland to circa £230m, including £63m in legal due diligence.
However, the pandemic has “resulted in vendors withdrawing from sales negotiations, protracted negotiations and due diligence resulting in delays to completing acquisitions in the year to date”.
In its latest trading update, the firm said it has increased the number of live projects to four during Q1, with an estimated capital value of around £21m, on the back of its acquisition of management company Nexus and its development arm.
The company expects to be on-site with two of these projects by early Q1 next year. PHP’s medium-term pipeline comprises 18 projects with an estimated capital value of approximately £127m.
PHP settled 91 rent reviews during the quarter, increasing its rent by £500,000 per annum.
At the end of April, more than 99% of Q2 rent had been received. Of the group’s contracted rental income, 90% is either paid directly or indirectly by the UK and Irish governments, with the balance mainly coming from pharmacies co-located at its properties.
Harry Hyman, chief executive of Primary Health Properties, said: “We remain in a very strong and robust position and have made good progress operationally across our rent review and asset management activities.
“The Covid-19 pandemic has highlighted the strength and attractiveness of the primary care sector and, with our active pipeline of both short- and medium-term development and acquisition opportunities, the board remains confident that PHP is strongly placed to execute its strategy.”
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