Toronto-based Northwest Healthcare Properties REIT has sold its remaining interest in Assura PLC for approximately $139.3 million, completing a two-phased divestment of the U.K.-based firm valued at over $209 million (all figures Canadian). 

Announced Thursday, the second share sale by Northwest (NWH-UN-T) finishes a divestment it started by selling 33 per cent of its stake for approximately $70 million earlier this month. The selling price of the two share tranches Northwest sold resulted in a gain of over 20 per cent to the REIT’s IFRS book value as of Dec. 31, 2024.

Northwest’s last tranche of Assura shares represented approximately five per cent of its public float.

The transaction comes as Altrincham, U.K.-based Assura was acquired by a company formed and owned by U.S.-based investment firms KKR & Co. and Stonepeak Partners LP for approximately $2.9 billion.

On its website, Northwest no longer lists any U.K. properties. It has made a series of divestments from the country for approximately $917.3 million in total proceeds.

Northwest's transactions aimed at curbing debt

Northwest’s international portfolio of healthcare real estate totalled 15.8 million square feet of gross leasable area and 171 income-producing properties as of March 10. Its properties, which include hospitals, care centres, medical offices, clinics and research buildings, are located in North America, Europe, Australia, New Zealand and Brazil.

Managing its debt has been a priority of Northwest during the past couple of years, and management made a considerable dent in that area through the sale of its U.K. property portfolio - to Assura - and this most recent share divestment.

The sale of its U.K. portfolio to Assura in 2024 netted Northwest $885 million - divided between $708 million in cash and $177 million in Assura shares. The share stake made up approximately eight per cent of Assura’s public float.

Last year, Northwest repaid $1.1 billion in outstanding debt from the proceeds of selling 52 properties — 14 of which were in the U.K.

Northwest’s president Mike Brady said on a call for its Q2 2024 financial results: “the U.K. portfolio was a very strong portfolio. In an ideal world we wouldn’t have sold it, but it was a good portfolio, at a good price and we’ve had a lot of inbound interest which led us to run a formal process.”

The sale of its U.K. properties concluded a formal strategic review to better manage its debt. The company will maintain its focus on care and life sciences, and streamlining its operation and reducing costs, Northwest’s CEO Craig Mitchell said in a release.

To that end, Northwest reduced its debt level to approximately $3 billion during fiscal year 2024 from $4 billion at year-end 2023, and reduced its debt-to-gross-book-value ratio from 47.7 per cent to 44.1 per cent (not including the value of convertible debentures). It also saw a significant reduction in its overall interest rate on its debt, from 6.27 per cent to 5.52 per cent.

“We are in the right asset class, meeting the growing demand for quality healthcare facilities. We are excited about the future and are building a solid foundation for growth in healthcare real estate,” he said.

In the European market, the REIT now holds 43 properties across Germany and the Netherlands.