Primary Health Properties (LON:PHP) has had a year that reshapes the business, following the recommended acquisition of Assura, a deal that significantly expands its footprint in UK and Irish healthcare property. In Shore Capital’s latest research note, the broker argues the enlarged group now looks better aligned with the direction of travel in UK healthcare policy, where more care is expected to be delivered in community settings from modern, fit-for-purpose facilities.
At the heart of Shore Capital’s investment view is the combination of scale, a defensive tenant base and improving rental momentum. Research analyst Andrew Saunders puts it plainly, “The transformational acquisition of Assura has created a new social infrastructure powerhouse that we believe looks well placed to benefit from NHS reform, prioritising primary healthcare.”
A larger platform, with rental growth doing the heavy lifting
Post-acquisition, the combined portfolio is described as a £6.0bn triple-net estate spanning over 1,100 assets, and producing a contracted rent roll of £342m. Shore Capital highlights that organic rental growth in FY25 was ahead of expectations, up 2.7% on a like-for-like basis, with total rental growth of 3.2%, slightly above company guidance of 3.0%.
The note also flags that momentum has continued into the new year, with rental growth running at an annualised 3.4% in the first two months of FY26. Much of the FY25 uplift was driven by rent reviews, including open market rent reviews across primary care assets, which delivered additional rent on settled reviews.
FY25 results, dividends and what stands out
Shore Capital points to a set of FY25 results that show progress on both earnings and shareholder distributions, alongside early delivery on merger synergies.
FY25 highlights (as referenced in the research note):
- Adjusted EPS increased 4% to 7.3p.
- Dividend of 7.1p per share, up 3%, extending a long record of fully covered, unbroken dividend growth.
- Portfolio value increased to around £6.0bn following the Assura acquisition.
- Like-for-like rental growth of 2.7%, with total rental growth of 3.2%.
- Identified cost synergies of £9.0m, with 80% (£7.5m) already delivered.
Balance sheet actions, disposals and a clearer path to lower leverage
With a large acquisition comes a near-term leverage bump, and Shore Capital acknowledges this directly. Net debt at 31 December 2025 was around £3.4bn, and loan-to-value (LTV) reached a transitory peak of 57%. The investment case, however, leans on active capital recycling. The company has reiterated a commitment to disposals and joint ventures, including progress with the existing USS joint venture and evaluating offers relating to its private hospital portfolio, valued in the note at around £0.7bn.
On Shore Capital’s numbers, these steps underpin a forecast reduction in LTV to 49% in FY26.
Yield and “accretive earnings”, what Shore Capital is focusing on
Income investors will likely focus on the dividend outlook. Shore Capital points to quarterly dividends already being paid, and expects the business to benefit from earnings accretion in FY26, which helps support an attractive forward yield profile around the mid to high 7% range in the broker’s forecasts. In other words, the argument is that the dividend is being supported by earnings, while management works through disposals and integration to bring leverage down over time.
In Summary
Shore Capital’s latest research note paints Primary Health Properties+ as a larger, more strategically positioned healthcare landlord, with rental growth, early synergy delivery and a well signposted plan to reduce leverage. For investors who value dependable income and exposure to essential community health infrastructure, the broker’s view is that PHP’s prospective yield, underpinned by “accretive earnings”, remains the key attraction.
