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BIRMINGHAM, AL—Medical Properties Trust has struck a deal to acquire the real estate of 30 acute care hospital facilities located throughout the United Kingdom for approximately $2 billion.
The facilities are leased under long-term net leases to affiliates of BMI Healthcare, the largest private operator of acute hospitals in the UK.
In a related transaction, affiliates of Circle Health will acquire BMI and assume operations of its 52 facilities in the UK. Circle, an operator of UK acute hospitals and MPT tenant, has committed to a multi-million pound program to invest in facility infrastructure, technology and people as part of the transaction.
The lease arrangement is expected to provide a GAAP-basis yield of 8.9%.
The hospitals will be leased under a master lease structure guaranteed by Circle with an initial fixed term of 30 years, two 5-year extension options, and annual rent escalators linked to UK consumer price inflation.
MPT expects to fund the acquisition with cash on hand, including proceeds from recent US dollar equity and sterling-denominated bond offerings and borrowings under an unsecured sterling-denominated term loan facility.
The transaction is expected to close in the first quarter of 2020 subject to customary closing conditions.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
