Julie-Anne Mizzi

Valley Healthcare has taken the number of primary care centres (PCCs) in its portfolio to six, as it announces its agreement to acquire two new construction-ready PCC sites, in Clonakilty, County Cork and Listowel, County Kerry.

The Irish Infrastructure Fund, jointly managed by AMP Capital and Irish Life Investment Managers, established Valley Healthcare to invest in primary care centres across Ireland in February 2017. Primary care centres provide outpatient care to local communities and offer a full range of sub-acute healthcare and social services, reducing pressure on full-service hospitals within the Irish healthcare system.

Clonakilty and Listowel PCCs are the first greenfield sites for the Irish Infrastructure Fund. Both sites have planning permission and are ready for construction to begin. The sites will be occupied by the Health Service Executive (HSE), GP services and other health-related services.

Site preparations are already underway at Clonakilty, where works will commence next month on a 25,000 square foot site which is due to complete in 2019. The Listowel PCC will be a 20,000 square foot centre and its construction, which will begin in the coming months, is also expected to complete in 2019.

Philip Doyle, Principal of the Irish Infrastructure Fund, said: “The PCC acquisitions are an exciting step in the growth of Valley Healthcare and marks an evolution from our prior acquisitions of operational PCCs and completed sites, as by acquiring construction sites we are creating new capacity for the HSE and delivering convenient, high-quality health services to new communities. Furthermore, we hope the construction projects for these sites, which are each expected to employ around 90 local workers, will have a positive impact on the local economy.”

The four other PCCs held in the Valley Healthcare portfolio are located in Counties Kerry, Cork, Wicklow and Mayo.

Glencar Healthcare manages the operation and development of Valley Healthcare’s PCCs. Bringing expertise in healthcare management, it will be responsible for the construction and ongoing management of the new centres.

Professor Brendan Drumm, chairman of Glencar Healthcare, stated: “Glencar Healthcare is delighted to have the opportunity to work with Valley Healthcare and the Irish Infrastructure Fund, delivering and maintaining state-of-the-art healthcare facilities across Ireland and expanding the reach of the primary care system into new communities.”

Market view: Healthcare investment in Ireland

The new acquisitions for the Irish Infrastructure Fund come as AMP Capital’s infrastructure equity investment team publishes its global analysis of the infrastructure health market, finding attractive investment opportunities in Ireland.

Across all developed markets, demographic changes are increasing the strains on healthcare provision. People are living longer due to improved health technology and successful medical intervention, but in many instances their quality of life has declined. Healthcare institutions are mostly geared towards acute conditions but as comorbidities rise so too does frequency of care, often daily, and a greater need for tailored treatment which hospitals are not set up to provide. Given the high cost of acute hospitals, healthcare services have sought to reduce reliance on them seeking community-based, sub-acute solutions.

Primary care centres are community-based facilities that provide many health or social care services outside of the hospital setting. This includes GPs, public health nurses and a range of other services such as physiotherapy, podiatry, speech therapy, psychology and social workers amongst others. The provision of healthcare through the primary care network has been identified as a key component of the Irish Government’s national healthcare strategy.

Julie-Anne Mizzi, Global Head of Social Care at AMP Capital, said: “Changing demographics and the relentless growth of healthcare costs for the public sector means that evolving the healthcare model to be more efficient is critical. Primary care centres alleviate the pressure on acute hospitals, the highest cost part of the healthcare system.

“In its adoption of this multi-disciplinary primary care model, the HSE is leading the way. In an example of state and private interest being strongly economically aligned, the HSE has encouraged private ownership and development of primary care centres to ease the burden on acute hospitals.

“Not only does the primary care system reduce cost for the government, individuals benefit from tailored, ongoing healthcare, provided closer to home.”

AMP Capital considers Ireland to be one of the most attractive markets globally for healthcare investment. In addition to the primary care model, the substantial presence of private health insurance in Ireland (more than 40% penetration) has made it one of the few countries with an attractive private hospital market outside of the public health system. Private hospitals provide a significant contribution to the overall delivery of acute care in Ireland making them an essential part of the system, which offers attractive opportunities for investment.

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Philip Doyle

The Irish Infrastructure Fund (IIF), managed by Irish Life Investment Managers and AMP Capital, has established Valley Healthcare, a new investment vehicle that will invest in primary care centres in Ireland.

The primary care centres held under Valley Healthcare will be managed by Glencar Healthcare.

Primary care centres provide outpatient care to local communities, offering patients a full range of non-critical healthcare and social services and reducing pressure on full-service hospitals within the Irish healthcare system. The provision of healthcare through the primary care network has been identified as a key component of the Irish Government’s national healthcare strategy.

Valley Healthcare’s first acquisitions are two operational centres in Wicklow and Mayo, providing immediate cashflow for the vehicle. The primary care centres operate on a 25-year lease from the Health Service Executive, the Irish government body responsible for providing health and social services. Valley Healthcare is expected to add further primary care centres to its portfolio over time.

AMP Capital, on behalf of IIF, will provide its expertise in infrastructure asset management and origination, as well as capital to acquire and/or build the primary care centres. The centres will be managed by Glencar, who have a proven track record in delivering public healthcare services across Ireland.

AMP Capital’s Philip Doyle, Principal of the Irish Infrastructure Fund, said: “AMP Capital is delighted to develop this unique partnership with Glencar on behalf of the Irish Infrastructure Fund.”

“At a time when demographics are shifting towards an ageing population, we see a real opportunity for private sector investment to play a key role in further developing healthcare in Ireland. By partnering with Glencar, which is well known in Ireland for its expertise in healthcare management, we believe we are in a unique competitive position to provide high-quality essential healthcare services to communities across Ireland while also delivering strong returns for IIF investors.”

Patrick Burke, Managing Director, Irish Life Investment Managers, said: “The Irish Infrastructure Fund provides institutional investors with a unique opportunity to invest in a portfolio of infrastructure assets which underpin the Irish economy. The fund aims to provide investors with stable returns, from a combination of income yield and capital growth making it particularly attractive for defined benefit pension schemes. Valley Healthcare provides the fund with further sector diversification and establishes a presence for the fund within the Irish healthcare infrastructure market.”

Prof Brendan Drumm, Chairman of Glencar Healthcare said: “Health services across the world are transforming the way care is provided to ensure that many services which in the past required an individual to be admitted to hospital can in future be provided to them in comprehensively equipped multidisciplinary primary care centres. Major investment in new infrastructure is required to support this change. Private investment in public health service infrastructure, such as that being undertaken by IIF, greatly enhances the speed at which this essential infrastructure is established.”

The acquisition of the primary care centres in Wicklow and Mayo is being funded by 100 per cent equity initially, with the option to add debt at a later stage.

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