Medical Properties Trust Buys 40 Hospitals in Germany

Medical Properties Trust (MPT; Birmingham, AL, USA) has signed a sale and leaseback agreement with Median Kliniken Group (Median; Berlin, Germany), the largest provider of post-acute and acute rehabilitation services in Germany.

Under the terms of the agreement, an affiliate of Waterland Private Equity (Waterland; Bussum, The Netherlands) will acquire a 94.9% equity interest in Median. MPT will acquire the remaining 5.1% stake and will provide loans for up to the USD 900 million purchase price of the sale/leaseback real estate. The deal includes 38 rehabilitation and two acute care hospitals all over Germany. The agreement is also pursuant to a 27 year master lease with an initial lease rate within MPT’s 8%–11% target range, with annual escalators at the greater of 1% or 70% of the German consumer price index (CPI).

In addition to the Median acquisition, MPT also announced approximately USD 155 million in commitments and investments, including three acute facilities in the United States and three additional German rehabilitation hospitals to be leased to RHM Kliniken (Deidesheim, Germany), a current tenant of assets in Germany owned by affiliates of Waterland, the expected future majority owner of Median. The new facilities will also be leased back under long-term net leases with a weighted average initial cash lease rate of approximately 9.3% and CPI-based escalators.

“The acquisition of the Median real estate is a very compelling and unique opportunity for MPT and is fully aligned with our strategy to diversify our market-leading hospital portfolio across geography, operator, and facility type,” said Edward K. Aldag, Jr., CEO of Medical Properties Trust. “This is an important transaction because it significantly increases our asset base…and builds on our recent entry into the attractive Western European market.”

The transactions will significantly expand MPT’s asset base by approximately 30% to USD 4.5 billion, grow the total number of properties in its portfolio to 165, and increase the number of hospital beds by approximately 98%, to nearly 20,000 beds.

“As we increase our exposure to the positive European market dynamics, we will also maintain our core investment focus on the United States,” concluded Mr.Aldag. “We will continue to extend our leadership in the US market and build upon our new track record in Western Europe by selectively pursuing the most attractive opportunities with the goal of leveraging our strong investment capabilities for the benefit of our shareholders.”

Related Links:
Medical Properties Trust
Median Kliniken Group
Waterland Private Equity