MedicX - UK, MedicX acquires 14 medical centres for £45 million
MedicX Fund has completed the acquisition of a portfolio of seven operational, fully let primary care medical centres, together with seven further properties under construction. The purchase is by way of a corporate acquisition of GPG No.5 Limited for a cash consideration of £10.0 million including transaction costs of £0.8 million, and the assumption of existing debt facilities of £34.7 million of which £21.4 million is drawn. The completion of the development of the seven properties under construction will be managed by General Practice Investment Corporation Limited (GPI) who will retain all of the development and construction risk.
MedicX Fund's Investment Adviser has also negotiated a framework agreement with GPI, a leading third party developer of primary care properties, giving the Fund first right to forward fund future projects adding £35 million to the Fund's pipeline.
The completed properties within the acquired portfolio are on average less than one year old whilst the total acquired portfolio benefits from 38% RPI indexed leases with a further 5% subject to fixed uplifts, the balance being subject to open market reviews. This portfolio of high quality assets is spread throughout England and increases MedicX Fund's total property portfolio to 121 properties. Of these 109 are complete and operational and 12 are under construction.
The Fund's total annualised rent roll for all properties following the acquisition increases to £27.9 million from £25.1 million with the portfolio as a whole having an average unexpired lease term of 17.2 years as at 24 May 2013.
The portfolio has been acquired for a total acquisition cost of £44.7 million. The acquired debt has an average unexpired term of 15.0 years and a weighted average fixed cost of 4.47%. Following this acquisition, the Fund will have total debt facilities (including undrawn amounts) of £280.2 million with a weighted average estimated fixed cost of 4.45% and term of 16.2 years as at 24 May 2013.
The acquisition is earnings enhancing for the Fund with the impact on the Fund's adjusted net asset value based on the Jones Lang LaSalle (the Fund's valuer) valuation and the mark to market of the fixed rate debt on acquisition expected to be neutral.
David Staples, Chairman of MedicX Fund, said "I am delighted to announce this significant portfolio acquisition for the MedicX Fund and forward funding agreement with GPI, a leading developer of primary care properties. This transaction demonstrates the Fund's ability to acquire properties at an attractive cash yield and lock into low cost long term fixed rate debt and is in line with the overall investment strategy of the Fund.
Total committed investment since 30 September 2012 is now £50.1 million which takes the value of committed investment in the Fund's portfolio to £443.7 million.
The portfolio continues to perform well and the Company continues to deliver a good level of return for its shareholders."