Warrington-based healthcare property provider, Assura Group, has acquired 32 medical centres in a £62.5m deal to buy the Trinity Medical Properties and Trinity Medical Developments businesses.
The Trinity portfolio has a rent roll of £4m a year, equating to a rental yield of 6.4%. Based predominantly in the North West, North East and Scotland, its medical centres are let to GPs, NHS bodies and pharmacy operators.
Trinity's audited results for the year to 31 March 2013 showed an annual profit before and after tax of £0.7m and £0.6m respectively. As a qualifying real estate investment trust, Assura is exempt from tax both on the profits of the Trinity business and on a latent capital gains liability of about £2m.
Assura expects to deliver overhead savings of £0.1m and estimates a reduction in the interest charge arising on consolidation to be £0.1m. The resultant pro-forma annualised underlying profit improvement when Trinity is consolidated is therefore expected to be approximately £0.9m.
Assura says overhead savings will be delivered by managing the enlarged portfolio with the existing asset management team at Assura.
Assura is paying £6.9m in cash for Trinity after a provision of £1.7m to allow for the potential re-financing costs of the debt. It is assuming Trinity's existing debt of £52.1m, other short term creditors of approximately £1.4m and expects to incur transaction costs of £0.4m.
The provision for potential re-financing costs represents the full costs of re-pricing the debt to current market rates at today's date. The Trinity debt currently has an average maturity of 12.6 years and an average fixed interest rate of 5.6%.
Including the Trinity portfolio, Assura's portfolio stands at 197 primary care properties with a contracted passing rent of £40.7m. They include Assura Wallasey.
Graham Roberts, chief executive of Assura, said: "The acquisition will allow us to further enhance our outperformance of the sector, and illustrates the incremental returns our internally managed model can deliver from growth in our portfolio."