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Shore Capital provided an upbeat analysis of Primary Health Properties PLC (LSE:PHP, OTC:PHPRF) after the specialist real estate group confirmed advanced talks to seed a joint venture with its private hospital portfolio.The broker, which acts as adviser to the company, said the update continued a positive narrative first set out alongside March results, when management flagged a new strategic vehicle for the £700 million portfolio.
Shore noted that offers are being evaluated and are expected to conclude by summer 2026, ahead of the timetable laid out last year.
The analysts framed the deal as central to PHP's commitment to recycle capital through disposals, both outright and via joint ventures, to bring portfolio leverage within its 40% to 50% target range and lower net debt to below 9.5 times earnings.
On the enlarged group, Shore pointed to the delivery of £7.8 million of the identified £9 million in merger cost synergies, alongside a thirtieth consecutive year of unbroken dividend growth.
The broker also highlighted that the company, a real estate investment trust focused on healthcare properties, has been awarded three of the first wave of Neighbourhood Health Centres announced by the NHS in March.
Shore forecasts continued organic rental growth supported by asset management, development and operational synergies, with earnings accretion expected in the current financial year.
That underpins a forecast dividend yield of 8% and what the broker views as among the best risk-adjusted total return profiles in the sector.
Primary Health Properties is due to report interim results on 30 July.