57.14p

Questor says hold

Healthcare property company Assura entered the FTSE 250 a year ago and since then has continued its steady programme of growth.

Guaranteed tenants

Assura develops and invests in properties such as GP surgeries and clinics, benefiting from leasing to the NHS, which as a tenant has a very strong covenant.

It serves a low-risk industry where there is rising structural demand for care from the UK’s ageing population. At the same time, many GP surgeries are old, and increasingly unfit for purpose.

GPs used to own a share of the surgeries in which they worked but this has become less popular, especially among younger doctors. Assura has stepped in to provide modern healthcare facilities for rent. Rental income from these properties is typically secured for a long time, with an average lease of 13.5 years. Last year rents rose by 1.1pc.

However, without government support for primary healthcare funding, Assura’s market may plateau. Newer facilities generally offer savings in the long term because they are more efficient to run but cash-strapped NHS surgeries may put off moving if they think the money could be better spent elsewhere.

Assura argues that a GP shortage is putting stretched hospitals under even more pressure, so the country needs more primary healthcare centres, but it cannot change the situation itself.