The Priory Group faces spiralling rent bills after its new owner agreed an £800m sale and leaseback deal pegged to inflation.
The UK’s biggest mental healthcare chain was sold by Acadia Healthcare, a US-listed mental healthcare provider, to Waterland, a Dutch private equity firm, in January last year for almost £1.1bn.
The deal was largely financed via the sale and leaseback of 35 freehold Priory healthcare facilities to Medical Properties Trust, a US investor, which was completed in June. The rents are subject to annual inflation-based escalators, a filing to America’s Securities and Exchange Commission shows.
The Priory’s latest set of publicly available UK accounts show an annual cash rent bill of £43.3m as part of the deal, “subject to annual review”.
The Priory has been associated with running rehabilitation centres popular with celebrities, but it earns 90% of its revenues from contracts with the NHS and local authorities.
