Capio AB Completes £686 Million Sale Leaseback of 21 UK Hospitals

The Times - May 15, 2007

A consortium including HBOS and Sir Tom Hunter, the property tycoon, has paid £686 million for a portfolio of 21 private hospitals from the healthcare operator Capio AB.

The Prestbury consortium is backed by Sir Tom’s West Coast Capital, the Icelandic investor Baugur and Bank of Scotland. The group said that the hospitals would be leased back to Capio on 30-year leases, with an initial rent of £39.5 million a year (i.e. a 5.75% cap rate.)

Capio AB was purchased last year by a private equity consortium comprising Apax Partners, Nordic Capital and Apax France. They have placed a sale and leaseback of the group’s property portfolio at the heart of their future plans for the Sweden-based company, which also operates hospitals in France, Germany, Spain and across Scandinavia.

The deal represents the latest change in the rapidly evolving British hospitals market. BUPA, the UK healthcare giant, is selling its own portfolio of 26 private hospitals for what some observers have estimated could fetch as much as £1.4 billion.

Prestbury has completed a number of similar sale and leaseback deals recently. They include 220 pubs from Spirit Group, now Punch Taverns, for £500 million, as well as two portfolios of hotels from Travelodge for £527 million and the Bank of Scotland’s London HQ for £140 million.

HBOS has worked with Sir Tom on a number of deals, including bids for McCarthy & Stone, the retirement homes company, House of Fraser, the retailer, and Wyevale, the garden centre chain. Sphere: Related Content