MedicX acquires primary healthcare centre in Tallaght for €15.5m
British-listed firm’s Irish portfolio worth about €50m
The new health centre, which involves the refurbishment of an existing office building, will be let to a number of GPs as well as providing space for the HSE and for a pharmacy.
The investment is the fourth in Ireland by MedicX, the £384 million (€440 million) fund which has 157 primary healthcare properties across the UK and Ireland. Its Irish portfolio is currently valued at about €50 million.
MedicX has funded the transaction in part through the drawdown of €10.3 million from a €29.1 million credit facility with Bank of Ireland in March, with the balance coming from company funds.
The new health centre, which involves the refurbishment of an existing office building, will be let to a number of GPs as well as providing space for the HSE and for a pharmacy. The property is being developed by Irish group Feasible Developments and is scheduled to be completed by the end of the year.
The pharmacy will be let on a 15-year lease with a 25-year lease covering other services in the centre. In both cases, the leases will be subject to five-yearly rent reviews tied to the consumer price index rather than the open market.
The company’s first investment in Ireland – a 5,000sq m facility in Mullingar – opened in February. MedicX is also funding two other new primary care centres in Dublin – one in Crumlin, which is expected to open in the next few months, and another in Rialto, which is scheduled to open next year.
The company, which has sharply accelerated its interest in Ireland in the past year, said that rental yields here were considerably ahead of what it was securing in the UK. In its interim report published last week, MedicX said its Irish properties were valued on the basis of a “significantly higher yield” than the 5.17 per cent it was making on its UK portfolio, although it did not give a figure.
It said that its four Irish facilities would deliver €3.4 million in rental income once they were up and running.
The property fund, which was established by British healthcare investment group Octopus, has invested more than £34 million to date in Ireland.
MedicX advised shareholders in the half-year update that it had “a pipeline of identified investment opportunities of approximately £60 million in the UK and the equivalent of £50 million in the Republic of Ireland”.
“Of these opportunities, £35 million of assets are undergoing legal due diligence,” the company said.
MedicX said on Friday that, although the Irish market was “less mature”, it shared the demographics and political commitment that had allowed the British fund expand rapidly in the UK.
“It remains the belief of Octopus Healthcare Adviser and the board that Ireland offers good yields for quality properties let on long leases, generating principally government-backed income and making Irish healthcare property opportunities an attractive fit with MedicX Fund’s investment objective,” the company said.