Investment summary

The Q3 IMS confirmed the portfolio's operational stability. There was also positive news on refinancing short-term debt, with a new £75m interest-only facility from Aviva, at a 4% pa fixed all-in cost for the 7-year duration. Rent reviews in the first nine months achieved 3.2% annualised uplifts and £18m of assets were acquired in quarter, plus commitments to purchase two more properties. The 6.1% prospective yield is attractive relative to both underlying revenue visibility and UK-REIT peers.

Last updated on 09/12/2011

Industry outlook

Activity should recover once the industry has digested the implications of the Health & Social Bill, due to become statute early next year. It confirms the government’s commitment to deliver primary care from modern, purpose-built, environmentally efficient facilities. Changes to the UK-REIT regime confirmed in December are designed to encourage new REITs and institutional investment. Abolition of the 2% entry charge for new entrants should increase the attractions of corporate acquisitions.

Last updated on 09/12/2011