Primary Health Properties rides the pandemic

With a rent roll that is 90 per cent covered by government-funded agencies, there was never any doubt that Primary Health Properties (PHP) would come through the pandemic-afflicted start to the year unscathed. Its primary care health facilities continued to be used, even if this is mainly for GPs to sit at their desks and take phone calls from patients who were barred from entering the building. The company also managed a 1.5 per cent uplift in its rent reviews.

Property of any type seems to be doing well in a very buoyant UK market – the company’s management had previously complained of relatively restricted, high-priced opportunities in the UK. The extent of that value increase was plain in these results as the company booked a valuation gain on its total portfolio of a chunky £66.9m, or growth of 2.6 per cent. In total, the portfolio yields 4.70 per cent on £2.65bn. The direct development pipeline currently stands at £146m of which £21m is at an advanced stage.

PHP is one of the more defensive property companies out there with its healthcare niche. As an investor you pay on clear premium for that with a forward P/E for 2022 of 25, based on broker Panmure Gordon’s forecasts. Hold.

Last IC View: Hold, 150p, Feb 19 2021