Construction work has begun on a new £100m specialist hospital facility in Birmingham, which will provide acute care to private patients in the region, as well as extra capacity and access to specialist facilities for NHS patients. The capital is provided by M&G Investments (M&G) with investment from HCA UK.
The 138-bed specialist hospital facility is being built on the Queen Elizabeth Hospital Birmingham campus, for a partnership between HCA Healthcare UK (HCA UK) and University Hospitals Birmingham NHS Trust Foundation Trust (UHB).
The hospital will include a radiotherapy unit, and state-of-the-art operating theatres. It will be equipped with the latest technology to provide some of the most complex surgical and medical procedures and treatments across cancer, cardiology, neurology, hepatobiliary, urology, orthopaedics and stem cell transplantation.
This will give patients access to a level of acute private healthcare not currently available to the 500,000 people in the region who have private health insurance or who want to self-pay for their care.
Claire Smith, CEO of HCA UK Joint Ventures said;
“We are extremely pleased to be moving into the build phase of this project, we know that many patients in the region have to travel for acute private care and we are looking forward to being able to provide these services locally.”
Building the Hospital
M&G has acquired a long leasehold interest in the site and will finance the construction of the hospital which is being developed by specialist healthcare property company Prime, with HCA UK entering into a long-term underlease with M&G upon building completion. The 14,728sqm facility is being built by VINCI Construction UK.
Shailendra Shah, Head of UK Long Income Investment, M&G Real Estate said:
“By financing this construction through long-term leases which track any rises in inflation, it has been possible to attract pension funds and others to the sector. This approach brings benefits to healthcare providers, patients and retirement savers through the sustainable long-term returns generated for pension funds.”
Will Bilbrough, Development Director at Prime said:
“Selecting M&G and VINCI, achieving financial close and seeing construction start is the culmination of 2.5 years of partnership working between HCA UK, UHB and Prime to develop proposals for this state-of-the-art hospital and we are looking forward to seeing our vision become a reality.”
Prime secured planning permission for the 8-storey building in April 2018 and financial close was achieved in February 2019, moving the project forward into the construction phase which is expected to be completed in 2022. The capital is provided by the M&G Secured Lease Income Fund, which generates long-term, contractually inflation-linked cashflows by investing in ‘income strips’ – a real estate transaction whereby the property interest reverts to the counterparty for a nominal sum following a long lease term. The Fund has provided capital to universities, local authorities and the corporate sector and has a portfolio including committed developments of £732m. This is the Fund’s first transaction in the healthcare sector.