Primary Health Properties (LON:PHP) recently held a capital markets day in the Republic of Ireland (RoI), where it now has eight assets and looks for further strong growth, towards 10% of the overall portfolio. The RoI market shares similar drivers and attractive characteristics to the UK and currently benefits from higher yields and lower funding costs. The visit provided additional comfort to our forecasts for further income and dividend growth driven by asset acquisition in both the UK and RoI, an improving outlook for rental growth and more opportunities to optimise average borrowing costs.
UK and RoI fundamentals similarly positive
In both the UK and the RoI, there is broad political will to reform healthcare provision, placing more emphasis on primary care to meet the increasing healthcare needs of growing and ageing populations. This requires larger, more flexible, higher-quality premises and funding for their development. Like the UK, the RoI is catching up from a period of underinvestment, to meet the needs of an ageing population with increasingly complex healthcare needs. Its population growth is one of the fastest in Europe. It has plans to establish c 200 large, multi-disciplinary primary care centres (PCCs) and PHP analysis indicates that there are currently around half this number, and relatively few that are fit for purpose.
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