Primary Health Properties (PHP) has entered into a conditional agreement to establish a 50:50 strategic joint venture (JV) with the global institutional investor, GIC, to invest in private hospital infrastructure.

The JV will be seeded with 27 private hospitals from PHP’s existing portfolio, valued at approximately £700m.

PHP will retain a 50% interest in the JV and act as its property and asset manager. The firm expects to receive immediate cash proceeds of £500m from the transaction, net of retained equity interest and deferred consideration of £47.5m.

Completion is expected in November and PHP will use the net proceeds to repay variable rate debt facilities, including the remaining balance of the bridging facility put in place to acquire Assura in 2025.

CEO at PHP, Mark Davies, stated: "The establishment of this joint venture with GIC marks an important strategic milestone for PHP. In addition to generating proceeds to reduce our borrowings, the transaction enhances returns on invested equity for our shareholders and brings a highly aligned capital partner to support investment in essential UK hospital infrastructure. Together, we are well positioned to capitalise on the significant structural growth opportunities in the private healthcare market.

"PHP is delighted to have GIC as a partner and is excited about the opportunity to grow this platform in the future."

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