Value enhancing investment and development activity
We continued to make good progress in the third quarter, completing the acquisition of 22 medical centres and one development under a forward funding agreement at a combined cost of £84 million. These additions have a combined passing rent roll of £4.1 million and a weighted average unexpired lease length of 13.5 years.
Rental income increased
Assura now owns 498 medical centres with a total annualised rent roll of £87.4 million (30 September 2017: £83.1 million), with growth in the financial year to date driven primarily by acquisitions.
Secure and growing dividend
A key part of Assura's strategy is providing a secure, fully covered and growing dividend stream for investors. The quarterly dividend was increased by 9% for the January 2018 payment to 0.655 pence per share, equivalent to 2.62 pence per share on an annualised basis.
Financial position strengthened and capital deployed
In October 2017, Assura issued £150 million of unsecured eight and ten-year notes at a fixed rate of 3.04% and extended the Revolving Credit Facility by a further £50 million to £300 million.
In December 2017, Assura successfully raised a further £310 million from both existing and new investors, reflecting the strong support for our growth strategy. This capital has been swiftly deployed with £84 million of assets purchased by the end of December 2017 and in January 2018, we redeemed the Aviva secured debt of £211 million plus early repayment costs of £56 million.
Following this, gross debt stood at £430 million with undrawn facilities of £230 million.
Further details will be provided with the financial results for the year ended 31 March 2018, which are due to be released on 23 May 2018.
Market Background
GPs continue to highlight the challenges associated with a lack of space, poor layout and maintaining older buildings which are not fit for 21st century healthcare. As hospitals struggle to cope this winter, creating the infrastructure to allow more patients to be treated in the community is a key part of the solution. The autumn budget set out plans to invest £10 billion to make NHS buildings fit for the future, in line with the recommendations outlined in the Naylor Review, and we remain committed to playing our part. Assura joined with sector colleagues last summer to set out the potential for investment in primary care buildings through third party development, flagging that £3 billion could be invested over five years in the 'Primary Care Buildings Pledge'.
Jonathan Murphy, CEO, commented:
“Assura continued to make good progress in the third quarter, further diversifying its funding structure and investing in primary health care real estate. We remain confident in the outlook for the business for the full-year.”