Assura announces £250m JV

Also reporting full year results showing annual rental income topping £143m, the health-focused firm will work with higher education pension scheme USS to invest in essential NHS community healthcare buildings.

Healthcare property investor and developer Assura and Universities Superannuation Scheme, which has more than £75bn assets under management, will be 20:80 partners in the new venture, with USS the senior partner.

They said the partnership will support investment into essential NHS community healthcare buildings, helping to address the current backlog of patients waiting for care.

The joint venture has an initial term of 20 years and will be seeded with an initial agreed portfolio of seven assets (£107m)), transferred from Assura’s existing portfolio at a small discount to the March 2024 valuation.

The JV 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.

Assura will retain a 20% equity interest in the JV and act as property and asset manager, receiving asset management fees linked to the valuation of the portfolio.

The transaction will further strengthen Assura’s balance sheet, bringing additional diversity to the available funding sources to support its growth plan.

Lazard & Co acted as exclusive financial adviser to Assura.

Chief executive Jonathan Murphy said: “We are delighted to announce this exciting transaction with a high-quality and long-term capital partner in USS.

“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 re-deploy 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: “We are looking forward to working with Assura on this exciting joint venture. 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. Healthcare is a very important sector and we’re delighted to support investment in essential social infrastructure.”

The growth of rental income by 4% to £143.3m was the highlight of the full financial year to 31 March, Assura said. The overall value of its investment portfolio fell, also by 4%, and still hovers around £2.7bn. The group narrowed pre-tax losses, from £119.2m in 2023 to £28.7m.

With planning consent now secured, Assura is planning a summer start on its new 35,000 sq ft headquarters in Altrincham, having acquired the 1990s-built 3 Barrington Road office for £8.3m last year.