Primary Health Properties CMD 2025 & H1 2025 Earnings Report

Primary Health Properties EPS Results

• Actual EPS: GBX 3.50
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Primary Health Properties Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Primary Health Properties Announcement Details

• Quarter: CMD 2025 & H1 2025
• Date: 7/24/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 9:30AM ET

Primary Health Properties (LON:PHP) is a leading investor in modern primary healthcare properties. The Company acquires or forward funds the development of modern, purpose-built premises that are leased to GP's, government healthcare bodies, pharmacies and other providers of related healthcare services.

Primary Health Properties CMD 2025 & H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: PHP delivered a robust H1 performance with net rental income up 3%, a positive £20m revaluation surplus and a 2.2% increase in adjusted earnings to £47.3m.
• Positive Sentiment: The recommended merger with Assura is expected to generate c.£9m in annual synergies, create scale benefits and lower cost of capital, with temporary LTV of ~55% to be reduced via strategic JVs.
• Positive Sentiment: England’s new 10-year NHS plan prioritises community and primary care hubs, creating strong structural demand for PHP’s high-quality medical real estate portfolio.
• Positive Sentiment: With a portfolio of 517 assets, near-100% occupancy and 88% government-backed income, PHP has maintained a 29-year track record of dividend growth within a 40–50% LTV target range.
• Positive Sentiment: Advanced rent reviews and asset management are driving momentum, with a pipeline of 43 projects targeting c.15% rental uplifts and accelerating open-market rent growth.

Presentation

[Mark Davies, Director & CEO at Primary Health Properties]

Wonderful. Good afternoon, everybody. Just checking everybody can hear me at the back. I'm conscious there's a lot of people in the room. Can you hear me back at the room?

[Mark Davies, Director & CEO at Primary Health Properties]

Good. Excellent. Well, good afternoon, and welcome to our Capital Markets Update, our second in less than a year. Thank you all for coming and supporting us today, both those of you in the room and many of you who are dialing in online. There's clearly a lot of interest in our company and our sector right now, and we very much appreciate you being here with us today.

[Mark Davies, Director & CEO at Primary Health Properties]

I'd also like to extend a special thank you to many of you dialing in, including our shareholders, those dialing in from overseas. The transaction with Assura has created a lot of interest, increased liquidity in our shares. And this has created an opportunity for new high quality investors in our company. And we very much appreciate your support, particularly during this time. It was in fact only last October that I stood here in front of you before, we had a very positive Capital Markets Day.

[Mark Davies, Director & CEO at Primary Health Properties]

And the overriding message from today's update is following the government's ten year plan published two weeks ago, PHP is now prime for growth. We strongly believe the ten year plan is good for PHP. Our results announced this morning evidence we've reached inflection point for our sector with a significant growth opportunity ahead. So with everything that's going on in our marketplace at the moment, we felt it was important to give the market an update on the things that we believe are important about the terms of our proposed acquisition of Assura and with the publication of the ten year plan for the NHS issued only a couple of weeks ago. I'm absolutely delighted to be able to welcome Sir Jeremy Hunt, former Chancellor, Foreign Secretary and Secretary of State for Health, who's joining us today for a fireside chat on health care and many other interesting topics.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you, Jeremy. And equally as delighted to be joined by Dame Claire Girarda, who's been a practicing GP now for over thirty years and is a former President and Chair of the Royal College of General Practitioners. Thank you both for being with us this afternoon. So Jeremy will also provide some color around what's happening in this fascinating world at the moment with a bit of geopolitics thrown in for good measure, I'm sure. And I'm sure you'll all be interested to hear their views.

[Mark Davies, Director & CEO at Primary Health Properties]

But before we get started, just a little bit of housekeeping from me, if that's okay. As you all know, we are in an offer period at the moment, and there are limitations about what myself and Richard can talk about this afternoon. There will be an opportunity to ask questions, and management are extremely well rehearsed now on the takeover code rules. And we'll let you know, and I'm sure you'll treat that with respect when we're asking questions later on. So on to our agenda for this afternoon.

[Mark Davies, Director & CEO at Primary Health Properties]

I think we have a very interesting agenda for you. We will ensure to get through everything on time, give you the opportunity to ask questions, as I mentioned, both during and after the fireside chat. Firstly, I'll describe what I see as a very positive market backdrop at the moment, a significant opportunity for further growth ahead. Richard will give an overview of the financials we published this morning. It's a strong set of results during a week that Shura also published a very positive performance.

[Mark Davies, Director & CEO at Primary Health Properties]

Both companies for both companies to have published such good results in the same week strengthens the belief that we have come through the bottom of the cycle and are well positioned for future growth. At a busy time for the company with corporate activity, we remain focused on delivering value for shareholders, and you'll definitely see this in Richard's presentation later. We'll also look at the recommended combination with Assura. There are a couple of areas we'd like to spend a little bit of time on this afternoon. One is around capital structure and the future debt position.

[Mark Davies, Director & CEO at Primary Health Properties]

As we recognize, this is a very important area, making good progress with our plans for disposal of assets into a strategic joint venture, and I will provide a confident update on that. We'll move on to the ten year plan, specifically looking at how that impacts us today and more importantly, how we think it will have a positive impact on our company in the future. This government is committed to reforming the NHS. Moving patients into primary care is a key foundation of that plan. And this is a key driver of our growth and creates opportunities for us to add value.

[Mark Davies, Director & CEO at Primary Health Properties]

I think it's worth just reflecting for a moment, reminding ourselves, particularly for our new shareholders and those new to the story, why PHP is such a strong in such a strong position and why we are confident about our future. Our population is getting older. We're living longer. It's resulting in a demographic tailwind, which drives demand for healthcare infrastructure. Because of that, we've seen enormous pressure put on hospitals in a way that is clearly unsustainable.

[Mark Davies, Director & CEO at Primary Health Properties]

And the shift towards waiting lists, towards the importance of waiting lists at a phenomenally high primary care is going to be a key part of the future. Now, sadly, a lot of the premises in the sector are not fit for purpose. We still have doctors working out of what is little more than front rooms of what would be described as domestic Victorian properties. It's a far cry from what is required. Now we own a really high quality property portfolio that's fit for purpose and one that's got very attractive rental returns, but more importantly, also provides an outstanding environment from which to deliver community care.

[Mark Davies, Director & CEO at Primary Health Properties]

The bulk of our rental income is government backed, whether here in The UK or in Ireland. The reliability of our income has enabled us to deliver a fantastic track record in terms of growing our secure dividend for twenty nine consecutive years. We're seeing rental growth, which will continue to grow in the future. Rich has got a really good slide on this. And we're now starting to see double digit increases in London rents approved by the district valuer, making new schemes more attractive, such as Kilburn Park, which we're going to showcase you a little later on.

[Mark Davies, Director & CEO at Primary Health Properties]

We've got secure long term income streams with a walt close to ten years. We continue to see new leases being taken at between twenty to thirty years. This reflects the quality of the portfolio that we own and their importance for the future. Finally, we maintain a strict control on costs. We have a very efficient capital structure.

[Mark Davies, Director & CEO at Primary Health Properties]

This is important because one of the topics that investors have raised with us is that on the combination with Assura, our leverage will move up temporarily. I can assure you, we are already working on deleveraging plans, and we'll share more of that later, plus we'll deliver the synergies that we have announced. Now I'll pass on to our CFO, Richard Howell, for the financial update.

[Richard Howell, CFO at Primary Health Properties]

Thanks, Mark, and good afternoon, everyone. I'm going to run through the key financial highlights from the 2025 to give a more detailed look at rental growth, obviously, a key topic for investors. At the July, we announced a trading update with the key half year numbers, so most of this information has been in the market now for a couple of weeks. We're also going to review the capital structure of the combined group later in the presentation, so I'll come back to this very important topic later. The first half of twenty twenty five, another period of robust performance.

[Richard Howell, CFO at Primary Health Properties]

The group's annualized rent roll now stands at £158,000,000 in the first six months of the year. Net rental income was up to £78,600,000 an increase of £2,400,000 or just over 3%. This reflects £1,900,000 of additional income from rent review and asset management projects and £800,000 from the acquisition of the Lair Healthcare facility in Ireland at the start of the year, offset by a small increase in nonrecoverable property costs. After interest and administrative expenses, adjusted earnings increased by £1,000,000 to £47,300,000 an increase of 2.2%. Capital expenditure on the acquisition of Lair Healthcare and asset management activity took the loan to value ratio to 48.6%, but still within the group's 40% to 50% target range.

[Richard Howell, CFO at Primary Health Properties]

The group's portfolio now comprises five seventeen assets valued at £2,800,000,000 And after several years of valuation declines, the improving rental growth outlook and stabilization in property yields resulted in a positive revaluation surplus of just under £20,000,000 with rental growth in the period generating an increase of £29,000,000 offset by the impact of a small outwards movement in net initial yields of just three basis points or a deficit of £9,000,000 The revaluation surplus was a key reason for the increase in adjusted net tangible asset value per share to 106.2 p. And if we include the dividends paid, we generated a total accounting return of 4.5% in the six month period. PHP has continued with its progressive dividend policy and to date has paid or declared three quarterly dividends equivalent to 7.1 p or a 2.9% increase over 24%, and this will mark the twenty ninth year of consecutive growth. Dividend cover was maintained at 100% in the first half, with these results supported by the robust portfolio metrics with occupancy close to 100%, 88% of our income paid for by The UK or Irish governments and a long hauled weighted average lease term of over nine years.

[Richard Howell, CFO at Primary Health Properties]

The average cost of debt for the group remains at a competitive 3.4%, unchanged from the twenty four year end with 100% of our debt net debt fixed or hedged out. We also have one of the lowest EPRA cost ratios in the sector, and we saw this fall further to 9.8% as a result of a cost reduction program we completed last year. We've continued with our disciplined approach to investment with a focus on driving income from our existing portfolio, from rent reviews and asset management projects and development opportunities, primarily focused on Ireland. Now turning to rental growth, a very important topic for us area of focus. Like for like rental growth from rent reviews and asset management projects delivered an extra 2,200,000 of annualized rent or an increase of 1.4% in the first six months of the year.

[Richard Howell, CFO at Primary Health Properties]

Now the rent reviews we completed delivered most of this increase with an increase of £2,100,000 of extra income, an increase of 8.6 over the previous passing rent or 3% on an annualized basis. Importantly, open market value rental growth continues to improve with an annualized increase of 2.3%, and Assurer reported a very similar number at the start of this week. However, we are now starting to see open market rental growth accelerate with the first reviews from '22 to '24 started to come through when inflation was at elevated levels. We completed 37 reviews from this period, which delivered an increase of 12.3% or 3.6% on an annualized basis. The improving rental growth outlook was also supported by Assure's annual results announced earlier this week, and they reported an extra £4,500,000 of income for the full year or an uplift of 6.1%.

[Richard Howell, CFO at Primary Health Properties]

Additionally, we continue to progress an advanced asset management pipeline of around 43 projects, where importantly, rents are growing by around 15% from an average GBP 195 per square meter to GBP $2.23 per square meter, which are still very affordable rents and have little chance of challenge in the future. We continue to see strong rental growth reversion potential in both portfolios with a growing momentum in the future rental growth outlook. In the interest of time, we'll be taking questions on the results at the end of the presentation. So I will now hand back to Mark.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you, Richard. Very insightful and really positive momentum on rental growth, which is hugely encouraging. Since we stood in front of you at last October's Capital Markets Day, a lot has changed, and we've come a long way. We've been in extensive discussions with the Board of Assura, and we were delighted when they recommended our offer on the June 22, which we announced on the twenty third. So I'd like to talk you through why we think the combination of these two companies is extremely compelling with significant strategic and financial benefits to both sets of shareholders.

[Mark Davies, Director & CEO at Primary Health Properties]

Firstly, we believe there's a real earnings enhancing opportunity for shareholders by delivering cost operational and asset management synergies. We also expect that our cost of capital will come down. We've estimated annualized run rate synergies of approximately £9,000,000 Given PHP's operating model, we expect to continue to have one of the lowest EPRA cost ratios in the sector. We're also targeting having low fixed costs long term debt facilities. We were very pleased that Fitch recently reaffirmed the investment grade rating on the shore's debt at the time our offer is due to complete, we will be able to deliver scale benefits with a very large social infrastructure portfolio.

[Mark Davies, Director & CEO at Primary Health Properties]

The portfolio will be covered largely by government backed income, and we will retain strong financial discipline going forward. We will be one of the largest UK listed REITs, giving us greater index weighting, liquidity and investors the opportunity to invest in one of the leading assets of its type in The UK in a sector with strong structural growth potential. There is a growing realization that we have to improve the quality of The UK's healthcare infrastructure and do it in a way that's for the public good. The combination of PHP and Asura plays to this. We believe the private sector will continue to play an important role in delivering quality community primary care assets and supporting the government with its plans.

[Mark Davies, Director & CEO at Primary Health Properties]

We see further significant valuation and rental growth uplift, particularly when the district valuers start to look at what the market rent is going forward and encouraged by government to support investment. And finally, it goes without saying that PHP has an undeniable track record going back many, many years. We really do believe that we've one of the strongest management teams in the sector, and we're very committed to the future growth of the business. We're confident in delivering all of the scale benefits we've set out to shareholders and with an M and A track record of getting on with integration, driving synergies, doing this the right way and benefiting for the best of both people from both companies, the combination of the two companies is good for the market and both sets of shareholders. One or two things which we'd like to point out.

[Mark Davies, Director & CEO at Primary Health Properties]

We're going to maintain a progressive dividend policy payable on a quarterly basis. We're targeting between 80 to 90% of our income to be government backed. Now ours is very much a story that's focused around secure income and rental growth. We're looking at 3% plus growth on a risk adjusted basis. We think this is very attractive on long term secure income.

[Mark Davies, Director & CEO at Primary Health Properties]

As I mentioned, we're seeing continued demand for longer leases, typically twenty years plus giving us long term visibility. There'll be an opportunity for a small amount of risk control development in the future. We do need to see district valuers move rental values in the right direction for this to happen. There are encouraging signs this is happening, especially in London. As I mentioned before, we're starting to see double digit rental growth now in London, but the schemes to be tendered in London may need third party support, such as local authorities to get them off the ground.

[Mark Davies, Director & CEO at Primary Health Properties]

But recent activity is certainly a move in the right direction and encouraging. We need to see similar moves outside of London in terms of rental values, but we do believe this will come, particularly now that West Reading has said publicly that areas in need will be prioritized. In Ireland, our development pipeline is progressing nicely. Tucked away in the appendix, Slide 25, you can see that three life projects have recently advanced. I just want to touch on the financial framework for the future.

[Mark Davies, Director & CEO at Primary Health Properties]

As I said, we're very much targeting investment grade, BBB plus or better. And with the size and quality of the portfolio, this is very achievable. The combined group would start off with an LTV of approximately 55%, above our target range of 40% to 50%. But the intention is to bring that down through asset disposals into a strategic JV and to do this promptly. We've always managed with the financial discipline.

[Mark Davies, Director & CEO at Primary Health Properties]

There's no intention to change that approach. And the combination with Assurer will give us access to a wider pool of capital, which we believe can be obtained at a lower cost. Richard, I think I'm just going to bring you in just to talk through the capital structure.

[Richard Howell, CFO at Primary Health Properties]

Thanks, Mark. We've obviously had a very busy six month period to address the various financial requirements for the enlarged group and the combination. So I'm going to focus on what we've achieved to date and perhaps more importantly, what are the next steps assuming the combination goes ahead. We continue to receive strong support from capital markets for the proposed combination. Interest from the debt market in particular has been strong and good support has been received from both existing and new debt lenders, and this is evidenced by the new GBP 1,200,000,000.0 bridging and bank stock facility with Citi, Lloyds and NatWest.

[Richard Howell, CFO at Primary Health Properties]

Now the new facility we use for three different purposes: firstly, to pay for the cash component of our offer, $4.00 8,000,000 secondly, backstop various debt facilities subject to change of control events or have short dated maturities across both companies. And lastly, provide a large group with around GBP 300,000,000 of undrawn liquidity to enable us to carry on with our development and asset management activities. Fitch have also confirmed that Assura remain investment grade following the combination, and consequently, the GBP 900,000,000 of their listed bonds will remain in place and no change of control event will take place. We've also obtained change of control waivers on £416,000,000 of Assurer debt facilities with respect to their revolving credit facility and their £266,000,000 term loan with Barclays used to finance the private hospital acquisition last year. We've also restated this facility for a further two years with extension options out to 2029.

[Richard Howell, CFO at Primary Health Properties]

In the background, we continue to progress discussions with private placement loan note holders and other banks, including several new potential lenders, all keen to be involved with the combined group. We expect Capital Markets to remain receptive and open to the combined group as they have done historically for both PHP and Assura on a stand alone basis in the past. Now assuming the combination takes place on the August 12, there are several important next steps which we need to continue working on. As Mark has already mentioned, reducing leverage back to 40% to 50% target range continues to be a key priority for the PHP team, and Mark is going to discuss some progress being made regarding joint ventures and disposals in a minute. However, we also focused on refinancing and terming out the balance of the bridging facility together with refinancing insurers' short dated private placement loan notes.

[Richard Howell, CFO at Primary Health Properties]

And work continues on various options around this, which are being progressed. These are focused primarily around a new convertible bond of around GBP 300,000,000, and we've already received BHP shareholder approval for this level, new private placement options and also to potentially tap the listed bond market and lastly, as originally planned, to convert part of the bridging facility to a new revolving credit facility. As we discussed at the last Capital Markets Day in October, we also plan to accelerate the process of moving PHP's existing secured debt structure to an unsecured basis, starting with £450,000,000 of its revolving credit facilities, which we'd originally earmarked for twenty twenty seven 'twenty eight. Now I'm currently restricted from providing any forward guidance on the future capital structure, but we intend to provide further information in due course. Lastly, I would like to thank the various banks who have and continue to support the proposed transaction.

[Richard Howell, CFO at Primary Health Properties]

It is much appreciated, and we look forward to working together in the future. I will now hand you back to Mark, who's going to go through disposals and JVs.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you, Richard. Joint venture and disposal strategy. We're making good progress with joint venture partners on our disposal strategy. We've already engaged with a number of highly credible counterparties and are moving swiftly through this process. A shortlist is being finalized, and our preferred structure remains a strategic JV as we set out at our Capital Markets Day last October, and we are targeting a short term completion.

[Mark Davies, Director & CEO at Primary Health Properties]

As a consequence of these actions, we expect to reduce our LTV into the 40% to 50% target range through the receipt of these proceeds. Now as part of our JV discussions, we are thinking strategically about the private hospitals, where we think the growth prospects are good, as we saw earlier in the week from Assura's results. With a waiting list in excess of £8,000,000 we see guaranteed growth in rents supported by high demand, and our preference is to retain an economic interest in private hospitals in a strategic joint venture. And we continue to evaluate all options, including a sale. As a reminder, Assura has an existing JV with USS, which has to date acquired GBP 159,000,000 of primary care assets with a publicly stated capacity for GBP 400,000,000.

[Mark Davies, Director & CEO at Primary Health Properties]

And finally, the good progress we have made on delivering a strategic joint venture partner has been helped by the fact that we set this out as an objective at last year's Capital Markets Day, and there are increased number of global and UK funds looking at UK health care who like the security of the income stream and the potential for growth. Now just sort of going through the technicalities of transaction. This slide will be very familiar to most of you in the room today who we've been meeting with in the last few weeks. But just to recap, our recommended offer to Asura shareholders is part cash, 25%, which equates to 12.5p in a special dividend and 75% in PHP shares. There's also a mix and match facility available to those shareholders who choose to opt for that.

[Mark Davies, Director & CEO at Primary Health Properties]

The daily closing look through value of the PHP offer has consistently remained ahead of the consortium since May 16 over two months ago. I'd like to thank all existing and new shareholders for your continued support. Final bullet on this slide is following our FDI approval. There are no further regulatory clearances. Our transaction is not conditional on CMA approval, and this work stream is also progressing well.

[Mark Davies, Director & CEO at Primary Health Properties]

Next steps, Asure's shareholders are urged to accept our offer and to do that as soon as possible. We can therefore go unconditional, so please do take action. Unlike a scheme of arrangement, we do need shareholders to take action and actually accept the offer. This is not a scheme. This is not a vote.

[Mark Davies, Director & CEO at Primary Health Properties]

It's an offer. We are very grateful to our shareholders, 99.3% of those voting at our general meeting approved the Assure transaction on the July 1. Thank you for your support. Finally, the deadline for accepting our offer is the August 12, just over two weeks away, and the mix and match facility will remain open until the date our offer becomes unconditional. So for those Asura shareholders that would like more shares or more cash, you should act on this promptly.

[Mark Davies, Director & CEO at Primary Health Properties]

Now moving on to the ten year plan. It's very clear that primary care and neighborhood health centers, like PHPs, will be at the core of relieving pressure on hospitals. These neighbourhood centres will provide a broad range of services in a local community setting, and the government has quite rightly targeted the areas of greatest need and health inequalities. This is something that we welcome. And with over 500 primary care assets across The UK within the PHP existing estates, we are well placed to help the government deliver its plan.

[Mark Davies, Director & CEO at Primary Health Properties]

This plan is still developing, particularly on how funding may work for new development, but we can see that there are opportunities within the existing budget, how this can be reallocated and how we can help expand the services offered out of existing hubs through our asset management program, the private sector will play a big part. And it will no doubt become clearer in the future. And I'm sure Jeremy and Claire will have some very insightful views on this later on at the fireside chat. We will be able to mobilize quickly. We have the relationships, the skill set to deliver the improvement in care that is needed.

[Mark Davies, Director & CEO at Primary Health Properties]

So the message is quite clear. And the strategic shift of hospital care into the community settings, set out and the plan is a credible one, and more on that ten year plan a little later. We're now just going to move to three case studies. Many of our existing centers already own or must operate on a multidisciplinary basis. We've got some tremendous examples of this.

[Mark Davies, Director & CEO at Primary Health Properties]

Purpose built buildings such as Eastbourne, which was developed back in 2021, is a real life example of the government's plan to deliver healthcare infrastructure in neighborhood locations, delivering a wide range of patient services and transferring services away from hospital settings to modern purpose built community spaces. Eastbourne has the look and feel of what the government is calling a new neighborhood health center. It's been a great success, led by Doctor Mark Gaffney, a friend of PHP, and next to Wakefield, where we have a live example of doing this on-site here right now and today. This is the Trinity Medical Centre in Wakefield. It's a well established community asset.

[Mark Davies, Director & CEO at Primary Health Properties]

It was built over twenty five years ago. Patient demand has grown significantly during our ownership to over 27,000 patients. Trinity now employs over 100 medical staff, includes 16 GPs, eight nurses plus other health care professionals. Trinity offers a wide range of NHS and additional patient services, including routine GP, long term condition clinics, nursing, preventative services, family health, mental health, minor surgery and procedures. This high patient demand has allowed us to recently invest in the asset, and our current asset management will deliver a new twenty five year lease, additional space in excess of over 2,100 square feet, a new pharmacy building, additional double digit rent and importantly, an accretive profit on cost of over 13%.

[Mark Davies, Director & CEO at Primary Health Properties]

Now the reason we've showcased this asset today is we feel, and we're doing this on-site as we speak, that this is close to what a neighborhood health center of the future will look like. And we're extremely well placed to do many more of these from our existing portfolio around The UK as the government moves patient services from hospitals into the community. So finally, before we go into the moment you've all been waiting for and the fireside chat, maybe give Sir Jeremy and Dame Claire a moment to gather their thoughts. I think we're all mic'd up, so we're good for that. We're going to show you a video clip of Kilburn Park Medical Center that we've developed.

[Mark Davies, Director & CEO at Primary Health Properties]

We opened this literally a few weeks ago. Our development director, Tony, was there to cut the tape. The themes from this accretive new development case I'd like you to take away are this is a community asset, huge social impact, increased patient demand now and in the future, house building and regeneration, in this case, I think it's 2,500 new homes, is creating the opportunity for a new neighborhood health center. You'll hear reference to a local authority that's proactive, has helped us deliver this. We're creating critical UK social infrastructure assets.

[Mark Davies, Director & CEO at Primary Health Properties]

I think you'll see this in the video. We're moving patient services from hospitals into primary care, which is something at PHP we are very good at. So if I may play the video.

We first became involved in the project back in 2018 and it's arisen as a long standing requirement as part of wider estate regeneration by the London borough of Brent. They're regenerating their South Kilburn Estate which is around about 2,500 dwellings. They've been doing so over a period of the last fifteen years. This phase is called Peel Precinct and it's designed as the civic heart of the redevelopment of the estate.

It's been a project that's been around for a very long time and Brent as a councillor one of the more proactive in terms of working with the NHS in terms of place making. The original concept was that it would be a facility big enough for three GP practices. As it turned out, Kilburn Park actually merged with another practice, so they're currently in occupation, but there is significant capacity within the building to grow, so there is an additional capacity for a growth of about 6,000 on the patient list in terms of dealing with future growth linked to the regeneration of the area.

We have a range of patients from all over the world with all sorts of languages. It was a very deprived area and I think part of the regeneration is changing that level of deprivation. But we're looking forward to inviting a lot more of the new residents that have moved into the buildings that surround us. The old centre was in a Victorian building. The old building was listed, we couldn't make adaptations so we were restricted to using one floor for anyone that had a walking stick or used a wheelchair.

So now all of our patients can access all the rooms.

So what we have here is a range of room sizes which enable different uses for the same patient facing rooms. We've also a flexible working space for clinical staff which enables incorporation of digital and remote consultation as part of their day to day conduct.

At the moment, we've got around 7,000 patients, and we can certainly scale up to 13 on-site consultation. We can probably take on more now that we've moved into a bit more of digital consulting world. The response has been so positive. Everybody really enjoys the decor. Everyone's very happy with the sort of professional level of the rooms.

And obviously there's a lot more IT in this building. So we've got excellent call systems, self check-in, there's a lot of information we can pass on to patients now.

The intention with this type of services is to really look at avoidance, so really much more around same day access in terms of allowing patients to come here for urgent appointments rather than having to go to A and E. And the aspiration in terms of building in that capacity in terms of the sizing of the facility is to make sure that as we build up to those numbers, there is that enhanced range of services to try and prevent people going from the hospital in the first place.

I think Tony and I have worked alongside each other six or seven years. We've both been part of the programme, from conception to first design to delivery. So we have sort of been partners along the way. It's been a very good relationship I found them really helpful.

So in the context of this scheme, it's very important that we partner with third party developers such as PHP in terms of bringing for schemes that are of the right standard and actually give us that delivery option moving forward in partnership in terms of then delivering the facility. One of the things that the previous practice didn't have was a treatment room so they can do tissue viability for example which is important to diabetes and that facility is now available with the support spaces that are required. So it does allow the packers to extend that range of services and actually start to look more specifically now that they have their facilities right as to what they can take on board and deliver appropriately.

It's delivering on the agenda of broadening and deepening services in the community. So what this particular facility enables is for a greater breadth of services to be delivered. The practice here works very closely with the local primary care network and that is gradually evolving into neighbourhood health which is the government's intention for delivery of services through primary and community care. And what that means is that for service users, for patients, they can access a far greater variety of services local to them, than having to go to a hospital.

It's been a very successful building. Opened officially a couple of weeks which I attended and I think everyone's delighted with the outcome.

[Mark Davies, Director & CEO at Primary Health Properties]

Excellent. So on that very positive note, I'd like to invite Sir Jeremy and Dame Claire Gerard up to the stage. Round of applause. It's nice to settle in and relax. That was quite tense. I don't think we made any Not

[Analyst]

as tense as I am with

[Mark Davies, Director & CEO at Primary Health Properties]

all that language. Don't have clue what

[Analyst]

you said. Nor had Jeremy, by the

[Mark Davies, Director & CEO at Primary Health Properties]

I think we kept it to the script. I think we did okay. So it's my pleasure to introduce Sir Jeremy Hunt, who is a distinguished figure in British public life. Before becoming a politician, Jeremy, I think you were a very successful businessman. I think you ran your own educational publishing business, which you may have sold at a nice valuation. So well done to you for that.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

As big as your one.

[Mark Davies, Director & CEO at Primary Health Properties]

You also set up a charity to help AIDS orphans in Africa, which you continue to play an active role. Having served four covenant roles, which I believe is extremely unique and impressive for over ten years, Jeremy, of course, is well known to many of you in the room and very highly regarded as a former chancellor. But what is sometimes overlooked is that you held the role of Health Secretary from 2012 to 2018. And I believe you're the longest serving Health Secretary in modern history. Is that correct?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

I have the scars on my back, yes. Was a big I crossed swords with Claire many times when she was President of the Royal College of GPs, but we became firm friends.

[Analyst]

On record as saying that Jeremy is actually the best health secretary that we've ever had. And I say that even knowing that Bevan was a fabulous health secretary.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

There we are. Look at that. I hope

[Mark Davies, Director & CEO at Primary Health Properties]

a reason why we're sat in the middle, but it's no need for that now. I'm glad we got that out of the way. And I think your combined experience at the heart of Treasury, Jeremy, together with your tenure in health makes you exceptionally well placed to speak at today's Capital Markets event and take questions from the audience later. And then to my right, it is a great privilege to introduce Dame Claire Girarda, a very prominent leader in British Primary Care. Claire has been a practicing GP for over thirty years.

[Mark Davies, Director & CEO at Primary Health Properties]

And in a moment, you may tell us how many appointments you've done during that time. It's an incredible number. Claire is also the former President of the Royal College sorry, President and Chair of the Royal College of General Practitioners. And during this time, Claire was an outstanding leader in expanding GP led treatment, mental health and rebalancing, amongst other things, investment from acute to community. So that's the introductions.

[Mark Davies, Director & CEO at Primary Health Properties]

We're going to have a fireside open chat. I've got some pre prepared questions, which I don't think you've seen. That wasn't the plan. So I'm going to try and ask you some questions. And the audience, feel free to get your questions ready.

[Mark Davies, Director & CEO at Primary Health Properties]

We have an iPad, which I think I might have left over there. I have to get that boat under there. So we've got questions coming in from the virtual audience as well. So I'm going to start with you, Jeremy, if that's okay. And obviously, we're very interested to hear your thoughts today about the economy, the ten year plan, all of this sort of stuff, and maybe that will come a little later.

[Mark Davies, Director & CEO at Primary Health Properties]

But it's sometimes forgotten that you were the foreign secretary. And no doubt, during that time, met some very interesting personalities. We operate in public capital markets, and it's amazing how our share prices can be impacted by one tweet from Donald Trump. But maybe just tell us a little bit about your experiences as a foreign secretary, some of the people that you met and any interesting insights you can give to the audience this afternoon.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Well, I think I have to say that the most interesting person I met in that period was Donald Trump because he was in his first term. And and I think one of the moments I remember most vividly was when he came for his first state visit. We're now making plans for his second state visit, and I had to stand on the tarmac at Stansted Air to greet him when he arrived in Air Force one. And the plane landed and the door didn't open. And we were standing on the tarmac, you know, the line of VIPs waiting to greet the president of The United States.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And we all assumed that the reason why he wasn't getting out of the plane was because he was freshening up after an overnight flight or or something like that. Anyway, finally, the door opened and he came out. And it turned out what had delayed him was that he was on his phone having a Twitter war with Sadiq Khan, the mayor of London. And and the thing is and literally the first thing he said to me was how much he hated Sadiq Khan. That was his first words on arriving in The UK.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And I think there is actually an insight about how Trump works, which which is worth remembering. Whether you love him or loathe him, he is on TV, on social media for two to three hours a day. That is his thing. It's how he operates. And that's how he performed this extraordinary comeback to get himself reelected.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

When you think of all the things that were hurled at him and all the court cases he had, he still managed to get through. And the reason is because he's talking to people. He's talking to his base for two to three hours a day. And I think what that means is there's a lot of unpredictability because he'll say something one day and then he'll change it the next. And the markets this time around are learning to cope with that.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And they're actually seeing that although you get these daily dramas, and they really aren't daily dramas, in fact, in terms of economic policy, he's turning out to be a bit more pragmatic than perhaps people originally thought. And I think we're seeing this following the kind of the shock of Liberation Day. We're now seeing, you know, trade deals with The UK, with Japan, probably settling down to a 15% deal with the EU, a deal with China on rare earths and chip exports. And we are going to end up with a higher tariff world than we had before, and that is regrettable, particularly for The US economy. But it is a lot calmer than we perhaps thought.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And I think that's the big adjustment that everyone is making.

[Mark Davies, Director & CEO at Primary Health Properties]

Very interesting. Very insightful. Thank you. Do you think on on the subject of trade deals, do you think I was watching your recent podcast with John Bolton, I think it was, and he was describing that some of the one thing that Trump wants to achieve almost more than any else in this term is a super trade deal with China. Do you think

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

that's something that he thinks about a lot and is it achievable? I think it is something that he really wants. But I think he has to contend with the fact that the Chinese are absolutely phenomenal negotiators. I know this because my wife is Chinese. By the way, did want to say she was Japanese, which got me into a lot of trouble.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

But didn't be one of yeah. But the the reality is that that would be the biggest deal of all from his point of view. And so I think he would still like to do that. But I'm not sure how likely that is. I think we're more likely to end up with this reciprocal 25%, 20%, 15% deal that he seems to be settling with.

[Mark Davies, Director & CEO at Primary Health Properties]

Excellent. Very insightful. Thank you. So Clay, just moving on to you. I said earlier that you've been practicing GP now for over thirty years.

[Mark Davies, Director & CEO at Primary Health Properties]

And in that time, I'd like you to tell the room how many consultations you've done and any sort of highlights that you can share with us that

[Analyst]

Yeah. Well, I actually started working in general practice when I was a 15 year old girl, when I used to be a Saturday girl at my father's practice. And he was a single handed GP that went on then to be multi handed. In fact, I can remember him moving into his first health center. So that's very typical, very, you know, the conversation of today.

[Analyst]

And I started my own practice in my own practice, on 02/17/1991. And I'd been to the interview, which was a few months before, and they said, don't get pregnant for two years so you can settle in. And I actually arrived pregnant when I started my work. So, 1991, you wouldn't be allowed to say that nowadays, and I calculated fairly conservatively that I've had about 250,000 consultations during that time. So, starting off at five minute consultations, then we went to seven and a half minute consultation, and now we're at about twelve and a half minute consultation.

[Analyst]

So, I've seen an awful lot of people. I feel the time, even though I'm in an inner city GP, that I am part of the parish. I mean, those of you who live in London know that London's made up of lots of little villages, and I am part of the village of where I live and work and see now generations of of of patients, including the ones I the story I have, which is I remember my bike being stolen from outside the surgery, and I could see it. I could see them, see the young lad stealing it. And so I ran, and I knew where he lived, so I ran to his home and demanded my bike back.

[Analyst]

And he actually gave it because he didn't realise it was my bike and I was of course his GP. He's now well into adulthood with his own children. So, yeah, it's been a wonderful, joyful job. And hopefully, we come to discuss the issue of of community hubs, you'll see that community hubs are not a new idea. They've been around since about 1939, but we have now the perfect set of opportunities to sort of do it properly and actually to build these community places where we can live, work, play and all the sorts of things that actually bring communities together.

[Mark Davies, Director & CEO at Primary Health Properties]

Fascinating. Very impressive. Congratulations, 200 What and 50,000 a career that you've had. Jeremy, if it's okay, I'm going to ask some health care type questions. I suspect when the audience come in later, they'll want to talk to you about your time as I Chancellor, should have mentioned earlier, we were very pleased impressed that you accepted our invitation this afternoon to speak to the audience immediately.

[Mark Davies, Director & CEO at Primary Health Properties]

But I understand that it took you thirty minutes to accept the invitation to be Chancellor. You didn't even have Liz Truss' phone number. Maybe you can tell us about that a little later on. So just the ten year plan is sort of an important topic for discussion this afternoon. And we know that you've supported primary care historically in your role as Health Secretary.

[Mark Davies, Director & CEO at Primary Health Properties]

Could you talk to us about the ten year plan? And is there anything in that plan that you think is encouraging for us as an investor in primary care real estate?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Sure. And I think the first thing to say is, it's it's really important to understand why having a ten year plan is really significant. So the NHS is the largest employer in Europe, one and a half million people, fifth largest employer in the world. And it's a bit like the the five year plans launched by the Communist Party in China, and people sometimes write them off and say this is just words. But the truth is that the Communist Party in China has to get the message out to more than a billion people, and those words echo everywhere.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And so what this ten year plan does for the NHS is only the second one the NHS has ever had, is it sends a signal about the direction of travel. And it's not just over the parliament. It's over ten years. And it's actually the strategy in it is very similar to the first ten year plan, was launched by Simon Stephens in 2019. This idea that prevention is better than cure.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

We need to treat people upstream. It's a good thing that it's consistent with what's happened before. And so, you know, from Wes Streeting's point of view, he has got control over a £190,000,000,000, which is the budget for the Department of Health and the NHS. If that was a country, it would be about the forty fifth biggest GDP in the world, about the same size as Hungary or Portugal. So it is a huge investment.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And that's why this you have this weird thing when you're health secretary where, you know, at one stage when I had my own junior doctor strike, I was the most unpopular politician in the country, but you have absolute power. So if I visited a hospital quite regularly, and I used to find this completely ridiculous, they would literally paint repaint the corridors that I was gonna walk down before my arrival. And what he's saying in this ten year plan, which I think is is very relevant for you, Mark, and for PHP is that we have got to move care out into the community. Now the the challenge in this is that the the budget for the NHS is going up by about 3% a year, which is, not much more than the last parliament, quite a bit below the 3.6% long term average and a long way below the 8% of the early naughties. But why this is gonna happen is two reasons.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

First of all, the the 250 neighborhood health centers that have been promised are for the government gonna be the most visible example of a changed and improved NHS. So they have got a lot of political capital at stake to get these buildings up because they really want to point to these buildings. So there's there'll be a lot of energy into making it happen. And secondly, they're overriding their biggest single political commitment is to bring down waiting times. Now you might say, well, surely that's hospitals.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

But as as Claire knows better than anyone else, a proper neighborhood health center stops people going to hospitals, and this is what's gonna stop the NHS waiting lists growing. So they will have a very key strategic impact for the government in bringing down the waiting lists by stopping people needing to go to hospital. So for that reason, I think it's actually pretty exciting news for the business that you were just talking about.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you very much, Jeremy. That's very helpful, very insightful. Claire, as you spend a great deal of your time speaking to people on the front line, what do you think the ten year plan means for general practice?

[Analyst]

Well, I mean general practice is in a strange place at the moment. It's and I know this has been taped, so forgive me if you're a GP listening to this. GPs like to whine. They like to moan. And in fact, if you Google, as I did once, end of the NHS as we know it, GPs finished.

[Analyst]

The first time it was ever mentioned was 1946, so since 1946. So it's very difficult to say what they think, but actually talking to GPs, we are now for the first time seeing light at the end of the tunnel. So the idea that the ten year plan is very, very primary care focused, as Jeremy said, it's shifting, it's going from treatment to prevention, analogue to digital and from community to and from hospital to community. But actually the most exciting bit, I think, is the investment in new premises. It's a recognition that if you want to deliver good care, if you want to do anything well, you have to have a space that's fit for purpose.

[Analyst]

Until recently, I consulted from a refurbished disabled lavatory. Now, okay, didn't smell anymore, but that was my consulting room. And it doesn't feel right to be consulting, let alone having patients. So I think we are seeing now the green shoots, the excitement again. There is still a lot of uncertainty for my profession.

[Analyst]

There's a whole debate is at the end of the partnership model. What does it mean neighborhood budgets? What does it mean for who's controlling these budgets? What does it mean for GPs with special clinical interest? What are we actually going to see the transformation that's been highlighted in the plan?

[Analyst]

Because we have been there before many times when we've been promised that change is going to happen and then it doesn't happen because either we get another election or something hasn't doesn't. But it's it is for me a very exciting time and for many of my colleagues an exciting time.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you very much. Very, very interesting. Jeremy, going back to you, in your time as Health Secretary, you supported GBP 1,000,000,000 primary care infrastructure fund. Wonder I if you could just tell us a bit more about this and whether there's something that West treating and the current government should be looking at?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Well, as Claire says, in the end, the constraints you have are workforce and capital. Those are the two big things that we're going to need to unlock this. And capital is always the poor relation when it comes to the NHS because as I know from my time as chancellor, we spend as a country about 100,000,000,000 a year for our total capital budget. But there's a lot of compounds a lot of money, but there's a lot of competition. There's nuclear power stations, there's the defense budget.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And the NHS capital budget has gone up from about GBP 11,000,000,000 to about GBP 13,000,000,000 a year, which is a 20% increase. That's very good news. That's what Rachel Rees announced in the spending review. But there's a lot of competition for that. So you've got the RAC hospitals, the hospitals which have these RAC problems in their structures, that's about GBP 5,000,000,000.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

You've got the IT program, which is about GBP 10,000,000,000. And you've got the backlog of hospital maintenance, which is about £11,000,000,000 So for this to work, which I think is a very interesting proposition for you, Mark. I think we are going to see a new version of PFI, which is the previous Labour government's initiative to try and attract private sector capital. It will have to be better value for money than the last version because we can't end up with a situation where I think the Queen Elizabeth Hospital, percent of its total budget was paying fees for its PFI deals. So it will have to be different, but I think it's very clear from what Jim Mackie, the Chief Executive of the NHS says that they recognize that in the capital projects that we have in the private sector, there is going to need to be more private capital and more partnership to deliver these new neighbourhood health centres.

[Analyst]

Mark, can I add something to that? That's So I did the Edinburgh Fringe a couple of years ago. I was a stand up comedian. Yeah, exactly. And it was called fifty Minutes to Save the NHS.

[Analyst]

So I went back to every single party manifesto since 1946 and just looked at what the health issues were. And repeatedly, and it was all political parties, they promised new hospitals and it went from 400 new hospitals to 180 new hospitals to about 200 new hospitals and then we had Boris Johnson, I think it was 40 What's new exciting about this, notwithstanding we have to repair hospitals because some are built on sinkholes and all sorts, but what's exciting is actually for the first time in my career, really and truly, we're seeing a commitment to build new, what we call, community hubs, health centres, Darcy centres, whatever you want to call them. And actually that is exciting because that will transform the care that our patients receive and it will transform the care that you receive because with digitalisation, more remote care, we probably need far fewer high street practices, so far fewer small practices, and far greater community hubs that are able to serve populations, I would say, of 30,000 to 50,000. The ones you've shown were 28,000, but actually by the time you get expansion of the population. And then capitalize on the pharmacists, which we have far more high street pharmacists that if you want to see a patient closer to home, so instead of having to to, you know, with your pushchair, get on two buses.

[Analyst]

So I think this is exciting, and I think what clearly we've got to do the improvement of some of the hospitals, but we I'm going to say we don't need as many hospitals, we don't need outpatient departments. We there's a lot of functions that happen other than mental health hospitals, by the way, which I think we need more beds. So I think this is an exciting time, and clearly, you're at the front of it.

[Mark Davies, Director & CEO at Primary Health Properties]

Absolutely. Totally agree 100%. Obviously, lot of this comes down to money, and you're in a very unique position, having been the CFO of the country and being a former Health Secretary. So we often get asked, it's all very well, these plans are very credible and who's going to pay for this. The argument that we make often when asked that question is, and I've heard you say something similar in previous podcasts I've been watching recently, is when a patient goes into hospital, because a lot of the issues that you've both described now costing the government, I think, between GBP 400 to GBP 500 a patient.

[Mark Davies, Director & CEO at Primary Health Properties]

That's not a strict like for like comparison. But according to government data and recent announcements, when patients are coming into primary care, that's costing GBP 40 to 50 a patient. So there's a cost benefit dynamic that we can help solve here. Do you think that's a credible argument and a credible response?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Absolutely. And so what you're trying to do with these and the reason why I think these neighborhood health centers are so strategic for the government is, if you have, let's say, a 90 year old lady with early stage dementia and she has a fall, then, you know, what will happen more often than not in the NHS is a 999 call, an ambulance will come, she will go to A and E, but because of her state, she will then stay in hospital for a very long time. That, by the way, will be very bad for her health. I think Claire might correct me if I'm wrong, but I think a dementia nurse once told me that every extra week you're in hospital is a month off your life expectancy because it's it's not a good place to stay for a long time. And it costs I think it's even more, but I've when I was health secretary, after the number I had in my mind was £500 a night for a hospital bed.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

So if you can avoid her having to be admitted through A and E because she has a better community health service, more contact with her GP, Best of all is to prevent the fall happening in the first place, and we're getting much better at that than we were, but then also to work out what alternatives might be to hospital provision. And then the other huge area of opportunity, which Claire touched on just now, is outpatient appointments. So these are the appointments where basically a GP wants to get consultant's advice, but doesn't actually know if an operation is necessary or not. That is actually a huge chunk of the 8,000,000 waiting list appointments. So if you could deal get give people that expert advice or that scan or whatever it is in a neighborhood health center, then you're going to see numbers peeling off those waiting lists.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

So that's why I have a high degree of confidence that we will see these despite all the financial pressures, we will see these neighborhood health centers built. And I think the other thing which we haven't talked about, but I think is also an important part of the mix is the government is trying to make some big reforms to the planning process to make it quicker to get permission to put up new buildings, and that should also be something that is a positive.

[Mark Davies, Director & CEO at Primary Health Properties]

Absolutely. And when we showed the Kilburn Park Medical Centre development earlier, that was very much a function of regeneration and housing development. And of course, with 1,500,000 new homes as part of the government's five year plan, We think that creates the opportunity to create these new neighborhood health hubs. And of course, we've got the expertise. But before I take the questions to the floor, could I just finish maybe just on digital because you've made some, I thought, really interesting remarks, clearly well rehearsed and understood remarks about digital in general practice, Claire.

[Mark Davies, Director & CEO at Primary Health Properties]

And we could see from the video in Kilburn Park earlier that there's more digital appointments taking place. We see from the assets that we owned, we see it in Wakefield, we see it in Kilburn, we see it in other places that we're now creating these sort of digital spaces for GPs to do consultations within the medical center. How should we think about digital? And obviously, it's one of the three pillars of the plan, isn't it, moving patients from hospital to primary care prevention and cure, but also digital is a key part of the plan. Do you have some insights you could share there?

[Analyst]

I mean, my practice, I'm a shareholder and a pioneer of something called eConsult, which is an asynchronous and it's really important you get this in your head, it's an asynchronous way of consulting safely with a health provider. So it's not a video. Video is just another way of doing a telephone or face to face. It's just and we can say we can do now and I said about ten years ago when we started this and I was laughed at that I think 75 of all consultations can be done remotely. That's asynchronously.

[Analyst]

And I was laughed out of it, you know, and then we had the pandemic and of course everybody started doing it. And we can do from registration to discharge remotely. The whole pathway can be done remotely. And people say, well, what about the elderly, etc. Etc.

[Analyst]

It's about eight percent of people that are not digitally literate, therefore, but we never designed the NHS for the illiterate. When I started general practice, a good proportion of my patients couldn't read or write, but we didn't stop innovation because they couldn't read or write. We just made sure that we helped them in other ways. So when you're starting and I, you know, there are ways, some of the physical things. So I think you need to be building premises now with soundproof spaces where you can consult in a soundproof environment, which many places lack completely and including, I think, what you showed there, you have big open spaces where we know that big open spaces you don't really need anymore.

[Analyst]

We certainly don't need waiting rooms anymore of that sort of size. But then we've got to make sure that with digitalization that you do start to I think digitalization, by the way, is is the future. I think remote remote care and the remote system is is what's going to tie everything up together. But when you're building, you have to bear this in mind. You don't need the spaces for reception spaces.

[Analyst]

You need if you want to turn those reception places into group spaces where you can have group consultations face to face, But also, you need to make sure that you're building the system for the future that enables us to do much more remote work in the practice itself. And by the way, I have to say the general practice has led the way in digital innovation. We've been the silent part. We've had to do it because we've had GBP one hundred per patient per year to deliver care, which isn't a lot of money. Jeremy gave us a little bit more when he was Secretary of State for Health, but it's

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Because he twisted my arm.

[Analyst]

I twisted his arm. So the only way we've been able to deal with increased demand and more or less flat line funding is through innovation, is through digital e prescribing, asynchronous consultation, all the AI that we're using at the moment, including AI transcription and all of those things. So that is the answer and you've got to build it. Before you do move on, I think the examples you've used there are exciting because they're brand new builds, but I think they're not that you need to go further. Because actually the whole point about a community hub.

[Analyst]

So Jeremy's a lady with early stage dementia. She needs to be able to go to have tea or coffee or whatever in a space that maybe does have health providers. This isn't about just providing health care but has health providers on online. So you can start to notice deterioration without having to have a consultation. We should be co locating well-being services with sickness services, and we should be able to put spaces, for example, children and playgroups with elderly, maybe playing music and dance or whatever.

[Analyst]

And I went to Shanghai before the pandemic, and they're building these sort of health centers or community hubs. And I think that's the next stage rather than just really a health center.

[Mark Davies, Director & CEO at Primary Health Properties]

Yes, absolutely. Thank you very much. Well, at that moment, I'm going to give the audience an opportunity to ask questions. Now I think we've got roaming mics, but just as we're just finding those and everyone's getting their bearings, there are some questions coming in online as well. I think we've got over 100 people dialing in remotely.

[Mark Davies, Director & CEO at Primary Health Properties]

So before we go to the room, so the first question is from Bruin Dolphin in Dublin, a long standing shareholder. How safe is the dividend? Will this rise? Can you answer that one for me? Not I think I can leave that one to you, Bart.

[Mark Davies, Director & CEO at Primary Health Properties]

What can I say about that? Well, we can't give projections. And for the avoidance of doubt, neither Sir Jeremy or Dame Claire can talk about the combination of us and Asura. We've got a twenty nine year track record of growing our dividend. And if you look at our track record, we acquired Medix in 2019.

[Mark Davies, Director & CEO at Primary Health Properties]

And history tells us when we're able to deliver benefits of economies of scale, that does give us an opportunity to enhance and accelerate our progressive dividend. I think I've answered that okay. Thank you to Brew and Dolphin in Dublin, a long standing shareholder. I think what we'll do most of these questions are health care related. So we'll come back to these because we spent a bit of time on that already.

[Mark Davies, Director & CEO at Primary Health Properties]

So I'm just looking around the room. Can you put your hands up? If you're a shareholder, we'd love to know because we'll prioritize your questions. So gentleman in the front here, if we could just please. If you're a shareholder, please say or

[Richard Knight, Portifolio Manager at Allianz Global Investors]

Thank you very much. Yes, we're shareholders. Richard Knight from Allianz Global Investors. Question for Jeremy. Because you've been both Chancellor and Health Secretary, are you optimistic about the ability of not particularly this government, but any government to really reform the NHS significantly enough to make it live within its rising demand environment that we all know about in an area of kind of constrained budgets?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Look, it's very tough.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

There's no doubt about it because there are so many extraordinary new treatments coming online. I mean, you haven't talked about it today, but genomics is absolutely fascinating. One of the things in the ten year plan is that The UK is going to aim or England is going aim to be the first country in the world where we actually put the do decode the genome of every single baby born on the NHS. And when that is put alongside someone's medical record, we will know an enormous amount about the illnesses someone is susceptible to and what could be done to prevent that, but it costs money, and you need people to interpret that data. So but it's a challenge for all countries.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

It's a challenge in in France and Germany. They have have a slightly different funding structure, but one way or another, all of us are gonna have the opportunity and the desire to spend a lot more on health because we are beginning to enter an age of longevity. We're all wearing, you know, wearables. And so but I think the NHS has got some advantages as well as the kind of well publicized disadvantages. The NHS is has got, thanks to the electronic health records that have been developed in general practice, has got the best longitudinal health records of any health system in the world.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And the EMIS health records and the System one health records that we have in England are absolutely world class. And that means that when it comes to research and development, they're a real treasure trove. And I think that you can look at other sectors of the state, like, for example, state education, and you can see that we have found a way to raise standards to some of the very best in the world. I think, personally, what the NHS needs to do is more decentralization because I think one of the things that stops innovation in the NHS is that, you know, hospitals have, you know, 18 different targets, monthly targets, GPs have 44 targets they're working towards, and this creates quite a lot of stultifying bureaucracy. But I I actually don't think the NHS is in any worse position than other health care systems.

[Analyst]

Thank you. And thank you, Jeremy, for saying that, because actually I would say to you, it not about reforming the model of health care delivery, the NHS, which is actually one of the most efficient in terms of we're about half the cost per annum as the German system, nearly half they're double. Certainly a lot cheaper than the French, etcetera. I think the big reform that has to happen is to us is to improve health literacy, to start talking to children about what health is about, is about moving treatment to prevention through the individual. Now we're all starting this with our wearables, but that has to be right across the population because that's otherwise, we can't have a bottomless pit of health money.

[Analyst]

We are going to, you know, have many exciting things, but we can't spend more money on health because it's taking it so it's about us, and it's about educating us around health care and about keeping healthy and reducing there's a fifteen year gap on average between first becoming ill and dying. And in that fifteen years, we're costing the state a lot of money. We're very unhappy. We've got a great deal of morbidity. We have to reduce that gap to one or two or three years, and that's beholden on all of us.

[Analyst]

Now we're all going to die, and we'll spend most of our health care money on the last year of our life, but we've got to reduce that fifteen year gap.

[Mark Davies, Director & CEO at Primary Health Properties]

Very good. Thank you. I think Stuart, just over there.

[Analyst]

Thank you. I'm not a shareholder. Gerry, I just have one question I have for you is much excitement talked about the ten year plan. And you then said that Simon Stephens came out in 2017 or 2018. So there's a new ten year plan before his ten year plan finished.

[Analyst]

So how do you get the consistency to deliver when actually a ten year plan is not really a ten year plan?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Well, it's a fair point. Was actually at the end of twenty nineteen, so it's even more recent than that. And I think the strategy is identical in the new ten year plan. But I think it is reasonable for the government to publish a new plan, because we had the pandemic and the pandemic, although the previous plan had full support, it was written by the NHS really more than by the the government. It was written by Simon Stephens.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And it had exactly the same principles that we've been talking about today. But the pandemic was a was the biggest shock to the NHS in its history. And that is really the root cause of the challenges that we're seeing in the NHS today. And so I think it's reasonable to have a reset. I actually think that what we're seeing in this new ten year plan is positive and pretty sensible.

[Analyst]

Absolutely. Until recently, I was chair of something called the NHS Assembly, which was there to keep the NHS executive on track to deliver the last ten year plan. And the last ten year plan had much more detail in it around specific diseases, had cancer targets, had really granularity around, for example, gambling, had a lot about digital. So there isn't a great deal of difference between the last ten year plan and this ten year plan. It's just that this, I suppose, accelerates and takes new areas.

[Analyst]

So the last one didn't mention premises, didn't mention rebuilding processes. So it's not that it wasn't delivered. It's just I think this one builds on to this.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you. Good question. Thank you, Stuart. Any further questions? We've got one at the back there.

[Analyst]

Gravis Capital. We are investors in PHP and Assura and long term supporters of the sector. So we understand that larger community hubs are important and that's the kind of infrastructure we need in this country. I think what we're seeing with Asura, KKR, private capital, public capital, willing to support the sector. You talked about PFI version three, other sectors talking about other funding models.

[Analyst]

So clearly, is there, have a ten year plan. What are the other roadblocks for building these new modern community centers? Is it to do with the way that NHS Trusts are organized? I think we have over 200 Trusts, if I'm correct. We have various integrated care boards.

[Analyst]

Are they are those roadblockers? What are the roadblockers are stopping from building this new level of infrastructure?

[Mark Davies, Director & CEO at Primary Health Properties]

Do want me to kick off or do you want go?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Yes, go for it.

[Mark Davies, Director & CEO at Primary Health Properties]

Yes. No, thanks for asking that question. We've met many times and discussed this with you and Matthew and your colleagues over the years. It was quite deliberate that we showed you Eastbourne earlier and went straight on to show you Wakefield and Kilburn Park. For three or four years, our sector, like many other REITs, we've all had to adjust to this higher interest rate environment.

[Mark Davies, Director & CEO at Primary Health Properties]

We've had significant build cost inflation, and it's been difficult to do Kilburn Parks and the Wakefields and the East Ports of this world. But gradually and fortunately, the market is obviously adjusting to that. The District value obviously plays a key part in that now and in the future. And we commented on that earlier. But I really like what Jeremy said earlier about the importance of this plan and the direction of travel that, that provides.

[Mark Davies, Director & CEO at Primary Health Properties]

We're clearly very confident that we're on the ground and we're talking to people. We've got these relationships, these stakeholder relationships that go back many, many years. We've been doing this now for nearly thirty years, as you know. Planning is becoming more straightforward. I think you referenced that earlier.

[Mark Davies, Director & CEO at Primary Health Properties]

If you look at the challenges that this government faces, it needs economic growth, it needs investment, it needs to reduce red tape and get on and do things. Pleasingly, our perspective, since the election of July 4 last year, I'm sorry, it was a tricky election for you, but we're so pleased you kept your seat and we know it was tight. This government has made the NHS its number one priority in terms of it's prepared us to create a plan for the future, but to get the checkbook out as well. So when Rachel Reeves is raising new taxes, a lot of that money is coming into the NHS. But money only takes us so far.

[Mark Davies, Director & CEO at Primary Health Properties]

They can't just keep throwing money at the problem. That doesn't deal or create a long term solution. So we're here to play that part. And it's a privilege to sit next two distinguished guests who understand this better than anybody. But have you got anything else to add, sorry, Joe?

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

All I would add is that when it comes to the broader question of economic growth, I think it's important to understand the NHS needs to be part of the solution, not just the problem that is draining away our tax money. It's 10% of the economy. And it is the engine of our life sciences sector, which has become over the last decade, the biggest in Europe, centred around Cambridge. Vaccines and treatments discovered in The UK saved seven point three million lives globally during the pandemic. That's more than from any other country.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

And so there is something very exciting happening there. And I think that the it's also very encouraging that the life sciences sector was treated by my government and also by this government as one of its small number of strategic sectors that we really want to focus on in The UK.

[Analyst]

And the NHS an enormous local employer of women, and it generates revenue within a local community. So I don't know about the barriers and all because I'm not an economist or financier. But certainly, as Jeremy said, it's the solution. We always think of the NHS as just a drain on the economy. It isn't a healthy workforce creates wealth.

[Mark Davies, Director & CEO at Primary Health Properties]

Yes, absolutely. And we see that in the assets that we own. And often, one of the first bits of feedback that we get, and you could pick that up from the video at Kilburn Park, is that by creating a nicer environment, it's actually nice for the workforce. Often get overlooked in all of this. And then the staff retention stats go up, and then there's a cost benefit dynamic to everything that we're doing.

[Analyst]

And we've also got to remember, I started general practice just after what was called the Tomlinson Review. I don't know whether you're part of that, Jeremy, but the Tomlinson Review looked at creating what we call intermediate care centers, which is community hubs by any other name, and they only built two, both of them in London, one in both in Lambeth, and both I had access to as a GP. And they were wonderful places and really had inpatient beds and day services, etcetera. So and they were great. So hopefully, that's what was going to be recreated.

[Mark Davies, Director & CEO at Primary Health Properties]

Wonderful. Thank you. We've got time for one more question. We're going to go over here. We can see you afterwards, if that's okay.

[Analyst]

Thank you. I'm Lourdio, and I'm a Director on the Board of BHP as well as, I mean, a shareholder. I had a question that picks up on the last theme. And there is a mental health crisis in this country and I was curious to know how can the primary care centres can help sort that and what kind of facilities do we need to think about? And what can the NHS actually cannot solve? And where should we focus from that respect?

[Analyst]

An excellent question. There isn't actually a mental health crisis. There isn't. I think there's I hate to say that there's an overinflation of mental health issues. So, you know, there's so many people that are self identifying as being mentally unwell.

[Analyst]

So but we can maybe pick that up afterwards. We don't have enough mental health beds. Alright. So that's the first thing. So I think when we talk about hospitals, I'm not talking about hospital mental health beds.

[Analyst]

If anything, the the move of care in the community, which psychiatry has done brilliantly, absolutely brilliantly, has meant now that we haven't got enough beds, especially for the acutely unwell. But what can what can these do? Well, in Lewisham at the moment, there's a there's a pilot looking at what, again, we'll call it a community hub by any other name, which co locates social care, housing advice, mental health services, primary care, physical health care. It doesn't have beds, but you can stay there for the whole day and be observed. So again, it does add value to this and I think, to be honest, it's a barn door obvious to create mental health 20 fourseven that's based in a community setting, that doesn't necessarily have beds, but has a space that you can stay that co locates with other services that because what we've had over the last twenty years is a sort of splitting up of the individual into lots of different bits of their mental health, know, their housing problems, their social problems, their depression, their anxiety, their drug misuse.

[Analyst]

So it can certainly help and the future will hopefully be that.

[Mark Davies, Director & CEO at Primary Health Properties]

Thank you very much. We're just running out of time now. I'm sorry, couldn't take your question. There are many more questions online, which we will respond to after today's event, and we'll endeavor to do that this evening. I know many of you have further questions for myself, Richard, Sir Jeremy and Dame Claire, who have kindly agreed to stay around after the presentation.

[Mark Davies, Director & CEO at Primary Health Properties]

Jeremy, I think you have 100 copies of your book in the lobby. And you've kindly said that you'll sign those personally for won't who be available for.

[Mark Davies, Director & CEO at Primary Health Properties]

And you can ask Jeremy and Clare any further questions at that point. I'm going to just do one final slide in a moment. So I'll return to the Lantern. But before I do that, I want just thank you very much, both of you indeed, for a very interesting and insightful discussion and debate. We're very grateful to you both for your time, the great public service that you've given the country over many, many years.

[Mark Davies, Director & CEO at Primary Health Properties]

And quite frankly, the country does need great people like you to be great again. Thank you very much.

[Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor at Primary Health Properties]

Great. Thank you.

[Analyst]

Thank you.

[Mark Davies, Director & CEO at Primary Health Properties]

Okay. Just to wrap up, and thanks once again to everybody for attending this afternoon, for your questions. And I'm sorry, we couldn't get to all of them, but we will absolutely endeavor to respond to all questions following today's meeting. So this brings the end to the formalities today. I hope you enjoyed listening to our presentations, the discussion we've had, and you've got a really good feel now for the opportunity that we see ahead and the excitement that we have about the future.

[Mark Davies, Director & CEO at Primary Health Properties]

We've talked about a number of interesting topics. Strategic joint ventures is something that you will see us commit to in the future. Our discussion around disposals, we will deliver, and we are well advanced with a number of credible third parties. We'll continue to assess, evaluate our portfolio to make sure we've got the right assets at all times. But if I may, and finally, if I could leave you with some key messages to take home with you this afternoon.

[Mark Davies, Director & CEO at Primary Health Properties]

We published a good set of results today. We're well placed to generate shareholder value. The release of the ten year plan is a huge positive for BHP. The combination with Assura would be transformational, creating a business with scale and a lower cost of capital. Rental growth prospects are compelling, and both our portfolio and Assura's are highly complementary to one another.

[Mark Davies, Director & CEO at Primary Health Properties]

Dividend growth is sacrosanct in this business for this management team. A twenty nine year track record of consecutive dividend growth provides the confidence our dividend will continue to grow as we power through thirty years and beyond. So on that positive note, I'd like you to take away the final comment from me, which is PHP is prime for growth. Thank you all for coming, refreshments, book signing and management available for further questions in the lobby outside. Thanks very much.

Participants

Executives

• Mark Davies, Director & CEO
• Richard Howell, CFO
• Jeremy Hunt, Former Health Secretary, Foreign Secretary & Chancellor

Analysts

• Analyst
• Richard Knight, Portifolio Manager at Allianz Global Investors