PHPRF (PHPRF) Q2 2026 Earnings Report, Transcript and Summary

Good morning, everyone, and thank you for joining us for PHP's interim results for the 6 months ended 30 June 2026. It's been another busy period for us, delivering a robust operational performance, translating into strong financial results and good earnings growth. We've also made very good progress on our key strategic objectives, and I'll walk you through those shortly. First, moving on to the highlights of our results in the first half. The operational activity in our portfolio remains a key driver for us. Rental growth from our rent reviews are a high-volume aspect of our business, which supports both earnings and dividend growth. We're again encouraged by the rental uplifts we have achieved in the period. This has been enhanced by the asset management and risk-controlled development activity, which is vital to set evidence for these rent reviews in the future. This activity, along with our disciplined cost control over overheads and financing, and the positive contribution from the Assura merger, has supported another period of strong earnings growth of plus 9%. Following the merger, we've retained a key focus on our strategic priorities of integration, delivering synergies, bringing our leverage back to our target range, and refinancing the acquisition bridge facilities. We'll come on to the details shortly, but we have made substantial progress on all of this, and our plans remain firmly on track. We're, of course, very proud that 2026 is our 30th consecutive year of dividend growth. Our business is all about delivering strong, secure, recurring, growing cash flows for our shareholders. Finally, the best of both approach from the merger means we are now seeing opportunities to create more value in our portfolio of critical healthcare infrastructure assets. The 3 markets we operate in, primary care U.K., primary care Ireland and private hospitals. All have strong structural demand and attractive investment characteristics, which give us confidence in delivering future growth for our shareholders. Moving on to some of the drivers of our operational and financial performance, which have enabled us to increase adjusted earnings per share by 9% to 3.8p in the first half, supporting our fully covered projected dividend for 2026 of 7.3p. Firstly, we've seen a 6% increase in passing rent on the reviews settled in the period. This is equivalent to 3.2% on an annualized basis. We've signed 29 asset management deals across the portfolio, including new projects, lease regears and new lettings, with a combined yield on cost of around 6%, achieved on a relatively modest capital outlay. Our EPRA cost ratio is now below 9%, reflecting the scale benefits of the Assura merger, the efficiency of how we run the business, and the speed at which we've been able to deliver merger synergies. The security and longevity of our income supports stable valuations in our sector. This has delivered a modest valuation surplus. Our net initial yield has remained at 5.4%, and our adjusted NTA is unchanged at 104p per share. At the time of the merger with Assura in late 2025, we very clearly laid out the strategic objectives we were focused on to ensure we delivered the expected value from this transaction. I'm pleased to report we've made substantial progress towards achieving all of these and continue to focus on delivering for all stakeholders. The integration and delivery of cost synergies is almost complete. The enlarged business is working together well across the portfolio, led by the new ExCo, and over 90% of cost synergies have now been delivered. Our deleveraging plan remains on track, primarily through the establishment of a planned private hospital joint venture, which I will talk you through shortly. We will also complete the planned transfer of GBP 103 million of PHP assets into our joint venture with USS. We have also completed GBP 8 million of targeted disposals, with more to follow. The acquisition bridge facility has largely been repaid and refinanced. We thank our banking partners, both existing and new, for their support on this. The final GBP 260 million of bridge facilities will be repaid when we realize the proceeds from our private hospital joint venture transaction in the next few weeks. It was very pleasing that we secured reduced credit margins of approximately 40 basis points on these new facilities, evidencing yet again the scale benefits of the enlarged business. Now I'll give you an update on the joint venture we are establishing for our GBP 0.7 billion private hospital portfolio. Terms have been agreed on an exclusive basis with a global long-term institutional investor, and we are currently well advanced through due diligence. The agreed terms are for the joint venture to be established on a 50%-50% ownership basis on day 1, with optionality to adjust that ratio in the future, and with PHP acting as the asset manager to the joint venture. This is an important long-term strategic partnership for PHP with a high-quality investor, as well as progressing our deleveraging objective. This will allow us to retain a meaningful financial interest in these growth assets, which are performing well in a resilient market with future growth potential. As well as improving our returns through ongoing management fees, we also have the ability to earn development and performance fees over time. We continue to advance discussions and remain on target to complete the transaction later in the summer, as we set out previously. And the proceeds we receive will land at the perfect time and we'll repay our bridging facilities in the next few weeks. We are very excited about this partnership and look forward to announcing a successful completion in the coming weeks. Before I hand over to Richard, I just wanted to set out where PHP currently sits in respect of our financial policies, our future targets, and where we expect these important metrics to move in the short and medium term. Firstly, we continue on our journey to become a fully unsecured borrower. We've made strong progress over recent months and expect to be 80% unsecured in the near term, with a longer-term target of 90%. Our LTV will be positively impacted by our disposals into the joint ventures, as well as the positive valuation impact from delivering rental growth. This will take our loan-to-value short term into the low 50s, and from there we will deliver additional capital recycling and valuation gains over time, with a below-50% LTV as our future target. Similarly, and equally as important, our net debt-to-EBITDA ratio and interest cover will improve from already robust levels as we progress through the deleveraging steps I've set out on previous slides. And we seek a strong investment-grade credit rating on the whole group in the near future. At this point in the cycle, with secure government-backed income and the stability and future growth in our portfolio valuation, we are very comfortable with our LTV being above target in the short term. Also, our weighted average interest rate will come down as we repay the acquisition bridging facilities, and we will return to a greater proportion of our debt being fixed or hedged. Overriding all of this is a secure income portfolio with over 80% of future income government-backed with a strong investment-grade underpin. I will now hand you over to Richard to talk you through a strong set of financial results. Thank you.

Thank you, Mark, and good morning to everybody online. Firstly, looking at the financial highlights for the first 6 months of '25, the benefits of the combination with Assura are now flowing through to the enlarged group with strong earnings growth and operational performance in the first 6 months of the year. Adjusted earnings increased to GBP 98 million, driven by a full 6-month contribution from the acquisition of Assura, which added an additional GBP 50 million of income. The adjusted earnings per share increased by 9% to 3.8p. Like-for-like rental growth generated an extra GBP 4 million of income, an increase of 6% over the previous passing rent or just over 3% on an annualized basis, driven primarily by rent review growth. To date, we have delivered over GBP 8 million or 92% of the cost-saving synergies identified on the combination with Assura, together with our continued tight control on costs has resulted in EPRA cost ratio falling from around 10% to 8.7% in the first 6 months of the year. The underlying portfolio generated a valuation surplus of GBP 18 million, driven by rental growth, which generated GBP 29 million of value, offset by just 1 basis point of yield expansion or a deficit of GBP 11 million. The yields across the portfolio have generally remained flat in the first half, which is consistent with the second half of last year. Notwithstanding increased U.K. gilt rates and volatility in the interest rate market, we have not seen any impact on values in our sector, which continue to benefit from the security of our predominantly government-backed income and near full occupancy. The investment portfolio and adjusted net tangible asset both remain unchanged at GBP 6 billion and 104p, respectively. The portfolio continues to benefit from strong fundamentals with 99% occupancy, a long 10-year WAULT and 76% government-backed income, supported by a strong debt demographic and political backdrop. Looking at the financing, PHP has continued to receive strong support from both existing and new lenders to the group. We have made good progress in the first 6 months of '26 to refinance the majority of the bridging facility put in place to finance the acquisition of Assura, together with a number of short-term bank facilities across both PHP and Assura, which marks an important step on the group's journey to becoming a fully unsecured borrower of Assura. A total of GBP 1.2 billion has been refinanced, including an GBP 800 million term revolving credit facility with a club of 8 banks, including 3 new lenders to the group. Additionally, we've taken on a new GBP 400 million 2-year term loan to refinance most of the bridging facility. This now leaves just under GBP 260 million outstanding, which is expected to be repaid from the proceeds arising from our deleveraging in the second half of the year. The new debt facilities also reflect some of the benefits of scale arising from the combination with credit margins 40 basis points cheaper than the facilities being replaced. The group's average cost of debt remains broadly unchanged at a low 3.8% and is expected to fall further to 3.5% in the second half of the year once we have completed the deleveraging activities. The group now has GBP 300 million of undrawn liquidity headroom after capital commitments. Turning to rental growth. We continue to be encouraged by the improving organic rental growth outlook generated by the portfolio. In the first 6 months of '26, we delivered an extra GBP 4 million of additional rental income derived mainly from rent review activities, which delivered an annualized growth rate of 3.2%, slightly ahead of previous guidance at 3%. Importantly, open-market reviews delivered an uplift of 6.3% over the previous passing rent. The rent review teams are now fully integrated and sharing rent review evidence across the enlarged portfolio, which will assist with future negotiations and a significant future synergy for the enlarged group. The rental growth benefits arising from the combination will flow through into future years. The portfolio is currently let off a low weighted average rent of GBP 200 per square meter with our asset management activities seeing rents rebased with uplifts of around 15% being achieved. 5 new developments completed in 2025 delivered an average rent of GBP 260 per square meter and the new development pipeline established in '26 across 4 schemes are seeing rents rebased even higher to weighted average GBP 280 per square meter. This new rental evidence clearly sets a positive outlook for future rental growth, and we believe the reversionary potential of the portfolio remains strong as new rental evidence is set, and we continue to target growth in excess of 3% per annum. PHP has now achieved its 30-year anniversary of consecutive dividend growth, and we approach the future determined to grow earnings to support the group's progressive dividend policy on a fully covered basis. There are 3 key pillars to achieving future earnings growth, a portfolio with strong reversion potential that will deliver future rental growth, supported by the security of our long-term predominantly government-backed income stream, a strong focus on cost control with one of the lowest EPRA cost ratios in the sector. We've already delivered the majority of the GBP 9 million of cost savings synergies forecast and expect the future ratio to be below 9%. A strong track record in balance sheet liability management with strong support and good access to various sources of capital. In the first half of the year, we have already managed to capitalize on the benefits of scale with credit margins 40 basis points lower on GBP 1.2 billion of debt refinanced with more refinancing initiatives expected in the second half of the year. I will now hand you back to Mark, who will take a closer look at the group's property portfolio.

Thank you, Richard. It's a proud moment for Richard and I to be presenting such strong results to you this morning, and this being the first period of full consolidation of the PHP and Assura business. Now I'd like to spend some time highlighting the attractiveness of the health care markets we operate in and some of the asset value-creasing activities we're currently working on. PHP operates in 3 resilient health care markets, and the majority of our portfolio is primary care assets in the U.K. Since 2016, PHP has also built the leading primary care portfolio in Ireland, and the merger with Assura saw us inherit a quality portfolio of private hospitals. The team that have come across the PHP during the merger have a leading expertise in private hospitals, having invested in the space for nearly 10 years. You can see on this slide the fundamentally strong investment characteristics of each of these markets, strong demand, fundamental tailwinds in the market, long leases, tenants offering a secure covenant, rental growth often linked to inflation and high-quality community-based assets, which are well invested with high return prospects. Crucially, all 3 of these markets can be accessed using PHP's unique platform in a growth sector, which has been enhanced through our best of both approach to the merger, and we have good market share, giving us size and scale advantages. I'd now like to move on to neighborhood health centers, which is an exciting growth opportunity, which will enhance PHP's future prospects. We were pleased to see that in April 2026, the NHS published its final guidance on what makes a neighborhood health center of the future. This is a further step forward on the plans to move services out of hospitals and into the community following on from the NHS 10-year plan published in 2025. The labor government have continued to place a high priority on improving the NHS and the new Prime Minister has a long-standing belief in prevention being better than treatment. Alongside the launch of the guidance, the first wave of 27 existing buildings, identified as neighbor health centers were announced, including 3 PHP assets, which I visited with the team recently, and I felt really excited about this opportunity for the future. These are all expected to have government grant capital available to improve the assets, extend the range of health services available to be delivered from our neighborhood health center. We will continue to work closely with local NHS stakeholders to assist in meeting their needs, and we expect this to present opportunities for PHP over the coming years, as I will show you as we walk through this morning's case studies. Firstly, to Weston-super-Mare and the right time to present some of the value-creating work we are doing in our portfolio. Weston-super-Mare is a really good example of a new build development capable of being designated as a neighbor neighborhood center when we complete this in 2027. I visited this asset under construction 3 weeks ago, and it's a large 5-story community health care asset, bringing together GPs, the local health Board, including the relocation of a number of specialist health care teams into this new facility and a community interest company supporting adult and child health services. It's a great example of how PHP can work with capital from our primary care joint venture with USS to deliver returns to shareholders and critical new health care infrastructure for the NHS. This is a GBP 19 million project, part funded by an NHS grant and only requires GBP 2.3 million worth of PHP investment. And the rental yield on this investment is boosted by PHP earning ongoing asset management fees as well as an attractive development fee, meaning our income returns are expected to be over 8% total returns well into double digits. Most importantly, it also provides strong rental tone, in this case, in the mid- to high 200s rent per square meter, and that captures build cost inflation for rent reviews on other medical centers in the county of Somerset and beyond. Working with the joint venture in this way is capital-light, it's risk controlled and for PHP shareholders delivers attractive returns and vital rental evidence and demand for future rental values. Next to the Tetbury Medical Center in Gloucestershire. This GBP 5 million neighborhood scheme in Tetbury is also being funded through the joint venture with USS. And the benefits are similar to Weston-super-Mare. It's capital-light, risk controlled. Our returns are boosted by the development fees, the ongoing asset management fees, and it sets a helpful rental tone in this region with PHP has a good representation and a portfolio of assets. Tetbury is a good working example of opportunities we will continue to see around the country where new housing developments require new health care infrastructure to meet the Section 106 requirements. And our experience tells us that no one is better at unlocking these opportunities than PHP. And we work with the NHS, both locally and nationally to deliver these schemes, which then allows the housing development to go ahead. And the growing population of Tetbury get a brand-new purpose-built medical center, a new pharmacy, we get a 30-year lease, fixed rental uplifts, high yield on cost in excess of 9% and double-digit total returns unlocking vital rental evidence along the way. Tetbury is a great scheme, and the team is well placed to do more of these in the future. I'm also pleased to report that in addition to Weston-super-Mare and Tetbury, we have a growing pipeline of U.K. primary care schemes that we expect to be funded through our joint venture with Brockworth and Coleford, the next schemes we hope to get over the line and the yield on costs projected to be in excess of 12%. The benefits of PHP are clear, with strong rental evidence generated, risk control through capital-light projects with a corresponding stronger returns aided by our ability to generate value through development and ongoing asset management fees. I'd just like to conclude on this part of the presentation by saying the following. These opportunities are only created because of the expertise and the relationship that PHP has developed over many, many years, and the Assura merger has enhanced the reach and depth of these opportunities. These particular schemes are inflation linked, removing ourselves and the NHS from any future district value constraints, enabling development to be set at higher rents per square meter, providing longevity and certainty to future cash flows. The USS JV is the perfect partner to build this model with size and scale and has an effective cost of capital. They bring a strong understanding of infrastructure investing and a strong social impact that we provide from PHP expertise and the platform for growth to co-invest. And it's an exciting win-win situation for all stakeholders, and it's our pleasure to present these opportunities to you today. I also wanted to case study some of the good work we are doing on the asset management side of the business. This includes a 100% owned asset in Wakefield, Yorkshire, illustrates how PHP's proven capability in asset management can drive value in the portfolio. The Trinity Medical Center serves over 27,000 patients. It was coming to the end of its lease cycle. We've worked in collaboration with the local practice, the local health Board. We've worked with the scheme to extend and refurbish the property, adding 13 additional clinical rooms. This increases the capacity for additional community-based services, including a minor operations suite out of our services, maternity, midwifery and the local MSK team. As well as an improved rental zone of the property, we have a new 25-year lease in place, a strong valuation gain in excess of the GBP 4 million invested in the property and improved energy efficiency. This project has delivered an attractive yield on cost and double-digit profit on cost. The final asset I wanted to highlight to you today is our GBP 21 million development of a new private hospital and day surgery clinic in Peterborough. Building on a strong relationship with the tenant, Ramsay Health Care, for whom we have now developed 6 new build schemes. The unit will create additional capacity in the area, primarily for NHS-referred procedures such as orthopedics as well as accommodating an outpatient clinic and diagnostics unit. Private hospital schemes such as this offer long 25- or 30-year leases with strong inflation-linked growth on rent reviews being run by a proven operator, experiencing growing demand, supporting a healthy rent cover. This asset is expected to transfer into the new private hospital joint venture when complete, and the PHP team and I are looking forward to attending a topping up ceremony on the 12th of August. Before I reach my concluding remarks, I wanted to remind you of the PHP investment case, which has been significantly enhanced by the transformational merger with Assura, our joint ventures in primary care and private hospitals and our lower cost of capital going forward. Many of you will be familiar with the specific points on this slide. So, I won't go through each and every one. But our portfolio of modern health care infrastructure assets offer investors the rare opportunity to access a specialist asset class with exceptionally high-quality secure cash flows in a resilient health care market that is a growth sector. And over a sustained 30-year period, the management team have demonstrated an ability to deliver sector-leading financial performance and returns for investors. This is a really exciting time for PHP shareholders. The strength of the platform is second to none and the future growth prospects are compelling. So, to conclude, we've delivered another strong set of results and our post-transaction objectives remain on track. The synergies are materially delivered. The integration is substantially complete. Our deleveraging is well on track. Our refinancing plans are well progressed and our bridge facilities will be repaid in the next few weeks. PHP's 30-year track record of dividend growth is driven by the quality of our portfolio, our expert team, operational excellence and close to full occupancy. PHP is an income compounder. Our portfolio offers infrastructure-like characteristics with long leases, secure income, almost no vacancy. Our earnings growth is supported by our operational capability, which drives recurring value with a positive trend in rental growth, enhanced volume of asset management deals, very close control on costs and a growing pipeline of risk-controlled development opportunities, we see continued momentum across the group. I'd like to conclude by saying whilst there's been a lot of decent corporate activity at PHP, we remain very focused on the task to deliver shareholder value and a growing dividend backed by a portfolio of secure long-term and predictable income. That concludes our presentation today. Thank you very much for taking the time to attend. And this will now be an opportunity where we invite you to ask the management team any questions.

[Operator Instructions] We will now take our first question from Chris Millington from Deutsche Bank.

I've got 2 really relating to the direction of leverage and just 1 on costs. So, the first one I wanted to ask really is, is it contingent on you hitting your LTV target of 40% to 50% in order to get an investment-grade credit rating? I'll go one at a time in order to make it a bit easier.

I'll pick that up. I'm sure Richard will be eager to chip in as well. Thank you, Chris. So, the Assura bonds that we inherited as part of the merger have a strong investment-grade credit rating that we retained. In due course, as I said on an earlier slide, PHP is on a journey to be an unsecured borrower, and we expect to continue with that progress. Fitch are the credit rating agency that rates the bonds and the company. Interestingly for them, when we read their analysis, some of which was updated quite recently, they very much look more closely at net debt EBITDA than they do to LTV. And we, as a company, do particularly well on net debt to EBITDA because of our profitability. So, the answer to your question is strong investment grade determined by LTV and that being below 50%. The answer is no, it's not. Net debt to EBITDA is of greater importance. But of course, as a company, we have our financial policies for a reason, and we have a loan-to-value policy as well as a net debt-EBITDA policy. Do you want to add to that?

Yes, it's probably just worth confirming that Fitch have just recently reconfirmed Assura's credit rating at BBB+ with a negative outlook, and that is likely to change to a stable outlook in the coming months as we deliver the JV deleveraging initiatives, which is positive. And obviously working with Fitch on a wider group credit rating, which I think we'd expect to be around the same when it finally gets published and we've delivered the deleveraging.

The next one is just about the disposals which are going to be required to take you down to that 40% to 50% LTV range. And just what your confidence is in achieving values around NAV in a world where we've got a slightly high cost of capital.

Yes. I mean we can only answer that question with what we see in front of us. Of course, we're live in the market. We are about to sell a portfolio of primary care assets into the USS joint venture. And obviously, the private hospital portfolio, which is well rehearsed and well known. We won't be saying today exactly what value those assets will go into the joint venture. Bear with us a few weeks, and we'll be able to tell you. But I think we can say with confidence that the market won't be disappointed with the value which we're transferring those assets into the joint venture. I was asked earlier by somebody about the sort of the general investment market. I think the debt market has been very strong, and that's underpinned a fairly robust investment market. But of course, in health care, barriers to entry are typically quite high. So, the opportunity to acquire assets in healthcare infrastructure is often very appealing. We see good demand for our portfolio and for the assets that we own. Therefore, can you say with confidence that you're able to sell those assets at or close to book value. Just give us a few weeks and we'll be able to tell you for sure, but we're fairly confident about the general market conditions, even at a time of volatility, of course.

No, that's very clear. The last one is just about the cost base. You've got a very efficient EPRA cost ratio, which you outlined. Do you think it's now simply a question of increased scale to get that lower, or are there other internal, proactive things you can do rather than just scale?

Yes, I think it's a good question because we've always had a low cost ratio here at PHP for many, many years. It's been a very well-run, efficiently managed business, and that legacy will continue. I'm absolutely sure about that. The improvements that you're seeing in the period we've just reported are principally down to the merger and the size and scale of the business. I've got no doubt that if we continue to grow from within the existing portfolio particularly, then we can become even more efficient. I believe, based on the latest information available in the market, we've got -- I think the second-lowest cost ratio. It would be nice to have the lowest cost ratio, I think we did have that at one point. Look, size and scale are very important. Not all of our portfolio is triple net, and we do everything we can to run the business as efficiently as we're able to. But the merger has obviously made us even more efficient than we were. Does that address your 3 questions, Chris?

Yes, it does.

The next question is from Kanad Mitra from Barclays.

I just have 1 on disposals. Obviously, we're supportive of keeping a higher economic interest in the hospitals joint venture at 50%. But that also means you probably have to dispose a little bit more from the rest of the portfolio. Just wanted to get some color on what you're thinking about on those lines? Are they going to go into USS JV? And is there enough scope to get them into the JV? Or will the JV max out?

Yes. Thank you. That's a good question. We've told the market this morning where we've updated on the joint venture on private hospitals that we are in exclusive and advanced stage discussions with due diligence, very well progressed. But we've also said, which clearly you picked up that on day 1 of this joint venture, we will be 50-50. There is the ability for that to change in the future based on both parties agreeing to do that. And that obviously is always an option that's available to us. On USS, this is a well-established joint venture now. They're a great partner to have because they understand critical social infrastructure. So, we have a great alignment with them. They have a very efficient cost of capital. With this particular transaction that we're doing and those new developments I described earlier, all coming into the JV imminently, that will take us to over GBP 300 million. I'm sure if USS were in the room with us today, they would say they'd like to see that increase further. So, we will engage with them, no doubt, in the near future about putting more assets into that JV and possibly expand the strategy and the remit of that joint venture to accommodate that, which will help us with the disposals if and should we decide to dispose more into that joint venture. The other thing that's going on in the market is we've seen some new entrants. We've seen local authority pension funds of size and scale. We stated an ambitious target to deploy about GBP 1 billion of capital into primary care real estate. So that's another option. But of course, we're confident about our valuation performance for the future. If nothing else, we're going to deliver rental growth that will come through to valuation. And we feel comfortable about having a loan-to-value in the low 50s. It's certainly more comfortable than when we're in the high 50s. And we think there are a number of options available to us within our existing portfolio as a pathway to LTV being below 50%. But also, as I said, going back to Chris' first question, highlighting the importance of net debt EBITDA as well. And we think we can get there quite quickly, and then we can decide what we do from there.

There are currently no further questions over the phone. With this, I'd like to hand the call back to Mark for any webcast questions.

Yes, we've got quite a few, by the looks of it. So, in no particular order Bjorn from Panmure Liberum. Thank you, Bjorn. You're asking 2 questions. Is your preferred route to reducing LTV through more JV opportunities or through outright disposals? I hope you think -- Bjorn, I just answered that with the previous question. But if not, you and I and Richard can pick that up separately. And your second question, you mentioned that 92% of the GBP 9 million of annual cost synergies have now been delivered. Should we expect a further benefit in H2 from annualizing those synergies? Or is H1 already reflected the majority of the run rate savings? Do you want to take that one?

Yes. So, there is more to come, Bjorn, in the second half, in particular around property costs. So, we've recently internalized Assura facilities management function, which they had outsourced, and we're just digesting that at the moment, but we know there's some significant cost savings to come through looking at a bit more detail in the second half of the year. But hopefully, when we report the full year results in early '27, we'll be able to give you an update, but we do expect more to come.

Thank you, Bjorn. The next question is from James Carswell at Peel Hunt. Thank you, James. Great to see the progress on refinancing and deleveraging. Could you give some guidance on where the cost of debt will trend over the next few years? Just looking back to one of Richard's earlier slides, you'll have seen James, average cost of debt currently running at 3.8% with the activities that we've described, we told the market this morning that's moving to 3.5%. The question is how much further do you want us to go? I guess, take a longer-term view, the way we think about that, Richard, is that we've got access to a much wider pool of capital now, the bond market and beyond. We've described that the 40-basis points reduction in credit margins that we've achieved. We're very confident we can retain a strong investment-grade credit rating as we described. I think we see good stability in our future cost of debt.

Yes. No, I agree with that, Mark. And I think the key thing to know is obviously, we're not immune to rising interest rates. But obviously, the rental growth and reversionary potential of the portfolio should more than offset the impact of any future interest rate increases in the future.

That's a good point, actually. Thanks for mentioning that. Thank you, James. Next question is from Vance from Astrella Capital. I appreciate the resilient cash flow of the assets. How do you feel about asset valuations in light of net yields below all-in new cost of debt. Yes, that's a question that comes up a lot. I mean the first thing I would say for a portfolio of high-quality secure income health care infrastructure assets to be valued at 5.4% net initial yield, I think, demonstrates real value. And we think potential upside, not just from rental growth, but potentially yield compression in the future. Look, absolutely, if we had to refinance all of our debt, which is just under GBP 3 billion tomorrow at today's cost of debt, dynamics of that would be questionable, but that's not the way we're structured. We've got a very good capital structure. It was strong before Assura. It's even stronger now, not just the maturity profile, but the access to capital that we have. And I think if there's any further questions around what that means to our cost of debt going forward, I think, hopefully, Richard and I, you feel have addressed that adequately from the previous question. So, thank you for that. And I think we've got 1 further question coming in. It's from a shareholder. So, we better deal with this in a good way. This is from Shayan from Gravis Capital. How competitive was the process to find a JV partner? How many parties expressed an interest? I'll just pause for a second while I think about how to answer that. As you can tell, I'm reading these out off the screen. I haven't seen any of these questions before. I mean, these processes, if I could describe it as a process, are always sensitive. And you never want to breach any commercial sensitivity. So let me start by saying, first of all, the PHP Assura merger was a very high-profile transaction, competitive, often in the public domain. It was well known to the market that we've taken on some elevated leverage to complete that transaction. So, the market knew that we had an intention and a stated intention to sell some assets and the obvious way for us to do that, as we flagged in August through to October last year was to realize some proceeds through our private hospital joint venture. All of that was in the market. So, we had a number of proactive approaches. We were not running a process at that time, very credible counterparties who wanted to work with us on that hospital portfolio. We did appoint an adviser. We did not run a beauty trade type process. It came to our attention there were 1 or 2 extremely high-quality, long-term global institutional investors that wanted to work with us. And those types of investors, because of their reputation, the strength and depth of the capital that they manage and their way of working, they don't typically participate in a big wide duty type process. So, we kept it very, very tight. It wasn't the world's biggest secret that we were intending to do a joint venture on our private hospital portfolio. And we were really delighted with the approaches that we had at the time, which has put us in a position to say here with confidence today that we are in advanced discussions on an exclusive basis. Actually, often to -- some people need to be reminded, we said we'd get this JV done originally within 18 months which would have been 31st of December 2026. We're going to do that earlier, and we will get this done in the next few weeks, as I've repeated throughout the presentation. So sorry, that's quite a long answer to your question, Shayan, but it is an important question that you asked. So, the second part of your question, how many parties expressed an interest? It's quite a long list, but that's not because we ran a process. That's because I think in many ways, the high-profile nature of the transaction we did last year. So, thanks again for your question. Bjorn, I can see you've come back on. You've noted that you're seeing stronger rental evidence. Are you finding this is translating into higher rental values being supported by the district valuer across the wider portfolio? To give me a break, do you want to just pick up on that?

Yes, sure. So, as we said in the presentation, asset management and development activities are seeing rents rebased 15% to 30% higher than the current passing rents across the portfolio. Obviously, we need to convert that through the rent review team into rental growth across the wider portfolio, plus there's obviously the benefit of the combined evidence across the combined portfolio. So clearly, a lot of work for us to do to deliver that reversion in the portfolio. But we think there's a lot of reversion to come, and that's why we're sort of quite confident about our outlook on rental growth for the future.

Good response, Richard. If I could just add to that. When I was presenting earlier the case study slides, development and asset management, with the exception of Wakefield, all of those schemes were inflation-linked or fixed uplift projects. And I think it's quite important to point that out. Very recently, our Head of Development, Rob James, attended on the company's behalf the Health Select Committee at Portcullis House in the House of Commons. And interesting enough, we had NHS England on the phone yesterday as a follow-up from that committee saying, "We've seen what you're doing in Weston-super-Mare and all these places that you described. Can we have a wider conversation with you about that and how we can drive more efficiency into the system?" And particularly capturing from our perspective, that opportunity, that growth that Richard described. But looking through the lens of the NHS and the delivery of the 10-year plan and the new neighbor health centers, we are providing new critical modern health care infrastructure to the NHS. So that's good for them, and it's good for us and good for our shareholders. So, I'm glad you've given us the opportunity to point that out. There's no further questions coming through on the forum. So, I think on that note, unless there's any further questions coming through by phone, I'd just like to take the opportunity to thank everybody for their attendance on a very busy day for the market, not just for real estate. I think someone described it to me, one of our shareholders this morning as super Thursday. So, your time and attention is gratefully appreciated. You can see that management are very focused. We've got plenty to do over the next few weeks. We're looking forward to making future announcements. Thanks for your support and look forward to seeing you next time.