Primary Health Properties : Annual Results Presentation 2020

AGENDA

• • PHP at a glance

• • Continued progress in 2020

• • Nexus internalisation

• • Key financial highlights and results

• • Investment and developments

• • Property portfolio overview and ESG

• • Debt summary

• • Dividend track record

• • Conclusion - investment highlights

• • Appendices

PHP AT A GLANCE

• • Leading investor in flexible, modern primary healthcare accommodation across UK and Ireland

• • Leading portfolio of 513 properties valued at £2.6 billion

• • FTSE 250 UK Real Estate Investment Trust ("REIT") with c.£2.0 billion market capitalisation

• • 90% of income funded by government bodies (GPs, NHS or HSE); rent roll £135m; WAULT of over 12 years

• • 25 consecutive years of dividend growth; dividend covered by earnings

• • Q1 2021 dividend of 1.55p declared, equivalent to 6.2p annualised, 5.1% increase (2020: 5.9p +5.4%)

• • £2.0m/1.6% additional income from rent reviews and asset management projects in 2020 (2019:£1.9m/1.5%)

• • All share merger with MedicX completed March 2019 and businesses successfully integrated creating significant shareholder value and synergies

• • Strong capital base with a prudent balance of shareholder equity and debt finance

CONTINUED PROGRESS IN 2020

• • Successful completion of the internalisation of the Group's management structure delivering annual cost savings of approximately £4m

• • Acquisitions in 2020

  • ✓ Portfolio of 22 purpose built medical centres for £54.0m with good asset management opportunities

  • ✓ Liverpool purpose built medical centre for £4.6m

  • ✓ Ireland forward funded developments at Arklow £16.9m (€18.7m) Banagher £4.5m (€5.1m) and Enniscorthy £11.2m (€12.6m)

  • ✓ UK forward funded developments at Eastbourne £8.4m, Mountain Ash, Wales £4.9m, Epsom, Surrey £4.0m and Llanbradach, Wales £2.8m

• • Development projects successfully delivered at Athy, Bray, Rialto and Banagher in Ireland with a total development cost of £46.3m (€51.8m) substantially de-risking forward funded development exposure

• • Successful, oversubscribed £140m equity raise in July 2020

• • £100m proceeds from September 2019 equity raise successfully deployed across 23 standing investments, 6 forward funded developments and 12 asset management projects totalling c. £107m

• • Maximum targeted loan to value (LTV) ratio lowered from 55% to 50%

• • Headroom/liquidity: £361m of undrawn loan facilities and cash post capital commitments

• • Robust rental collections with over 99% collected in both the UK and Ireland for 2020 rents

• • Rental growth from rent reviews : £1.7m/1.8% added to rent roll (FY19: £1.6m/1.9%; FY18: £1.1m/1.4%)

• • Covid -19 update: technology and digitalisation changing the shape of consulting and triage in the UK and Ireland; but

• • Realisation within the NHS following the creation of Integrated Care Systems ("ICS"), that will focus on 'collaboration rather than competition', that primary care can be used for many more things e.g. diagnostics, minor operations and treatments. More investment in healthcare likely across UK, Ireland and Western Europe

NEXUS INTERNALISATION - STRATEGIC AND FINANCIAL BENEFITS

• ✓ Acquisition by the Group of a fully operational management platform with the transfer of the systems, know-how and proprietary market knowledge that Nexus has developed since 1996

• ✓ Secures the continuity of a well regarded and experienced management team; including the services of Harry Hyman as CEO of PHP, consistent with the commitments made at the time of the MedicX merger

• ✓ An internally managed structure is expected to appeal to more investors broadening the universe of potential investors in the Company, in particular those investors unwilling or unable to invest in externally managed vehicles

• ✓ Confers operational benefits with a simpler decision-making process and a clearer and more accountable management structure

• ✓ As PHP is now of significant scale, an internalised management structure is more appropriate with succession planning, operational security and long-term stability expected to be enhanced as a result of the Internalisation

• ✓ Removes potential or perceived conflicts of interest between Nexus and PHP and reliance on Nexus as a third party asset manager

• ✓ The Company is anticipating achieving annual cost savings of approximately £4.0 million equivalent to 0.3 p per share

• ✓ The Company will assume Nexus's existing management and overhead costs which are anticipated to result in a lower ongoing administrative costs to the Company and the EPRA cost ratio, which is already amongst the lowest in the sector, is therefore expected to fall further

• ✓ The delinking of the Company's administrative costs from its gross asset value will provide further cost benefits as the gross asset value of the Company's portfolio is anticipated to grow in the future

• ✓ Potential for the Company's equity valuation to be enhanced and its cost of capital to be reduced

KEY FINANCIAL HIGHLIGHTS

Performance	31 December 2020	31 December 2019	Change
Net rental income (£m)	131.2	115.7	+13.4%
Adjusted earnings (£m)	73.1	59.7	+22.4%
Adjusted earnings per share (pence)	5.8p	5.5p	+5.5%
Dividends paid (£m)	73.3	59.4	+23.4%
Dividend cover	100%	101%	-
Dividend per share (pence)	5.9p	5.6p	+5.4%
Position	31 December 2020	31 December 2019	Change
Investment property (£bn)	2.6	2.4	+2.0%
Adjusted NTA per share (pence)	112.9p	107.9p	+4.6%
Loan to value	41.0%	44.2%	-320 bp
Management	31 December 2020	31 December 2019	Change
Growth on rent reviews	1.8%p.a.	1.9%p.a.	-10bps
WAULT	12.1 years	12.8 years	-0.7 years
EPRA cost ratio	11.9%	12.0%	-10bps
Average cost of debt	3.5%	3.5%	-

INCOME STATEMENT

31 December 2020 £m

31 December 2019 £m

Change

Net rental income Administrative expenses Performance incentive fee

131.2 115.7

(11.6) (10.5)

(1.6) (1.8)

+13.4%

Operating profit before financing costs Net financing costs

118.0 (44.9)

103.4 (43.7)

+14.1%

Adjusted earnings

Revaluation surplus and profit on sales

73.1 59.7 +22.4%

Fair value loss on derivatives and convertible bond Adjusted profit excluding MedicX exceptional adjustments Amortisation of MedicX debt MtM at acquisition

51.4 49.8 +2.0% (15.2) (33.6)

109.3 75.9

3.1 2.5

Exceptional revaluation loss arising on merger with MedicX - (138.4)

Exceptional item - contract termination fee arising on merger with MedicX - (10.2)

+44.0%IFRS profit/(loss) before tax Adjusted earnings per share IFRS earnings/(loss) per share

112.4 5.8p 8.8p

(70.2) 5.5p (6.5p)

+5.5%

BALANCE SHEET STRENGTHENED

Adjusted NAV per share (pence)

120.0

115.0

5.8

(5.9)

(1.5)

2.7

112.9

3.9

110.0

107.9

105.0

100.0

95.0

90.0

85.0

Opening NAV per share

Adjusted earningsDividends paidPortfolio revaluation

Interest derivatives re-couponed

Shares issuedClosing NAV per share

31 December 2020	31 December 2019	Change
Adjusted net tangible assets	£1,485m	£1,313m	+13.1%
Adjusted net tangible asset value per share	112.9p	107.9 p	+4.6%

INVESTMENT

✓ 23 assets acquired in 2020 for £59m with good asset management opportunities

✓

Strong active pipeline in UK and Ireland totalling £129m including £59m under offer

Lagan & Saltscar Surgery, Redcar	Newmarket Medical Practice,	West Derby Road, Liverpool	Crumlin Medical Centre, Wales
Lincolnshire
Tenants	Tenants	Tenants	Tenants
✓ GP Practices x 2	✓ GP Practice x 1	✓ GP Practice x 1	✓ GP Practice x 1
✓ Pharmacy	✓ Welsh Local Health Board

Purchase date:	May 2020	Purchase date:	May 2020	Purchase date:	December 2020	Purchase date:	May 2020
Acquisition cost:	£2.6m	Acquisition cost:	£2.2m	Acquisition cost:	£4.6m	Acquisition cost:	£1.9m
Size:	785 sqm	Size:	633 sqm	Size:	1,003 sqm	Size:	602 sqm
Number of GPs:	8	Number of GPs:	6	Number of GPs:	12	Number of GPs:	3
WAULT:	6.1 years	WAULT:	6.3 years	WAULT:	10.3 years	WAULT:	11.6 years
Rent review:	OMV	Rent review:	OMV	Rent review:	OMV	Rent review:	OMV

FORWARD FUNDED DEVELOPMENT PIPELINE

✓ Six schemes currently on site with a net development cost of £47.4m

Arklow Primary Care Centre, Co. Wicklow, Ireland

Tenants

• ✓ Health Service Executive (HSE)

• ✓ GP Practice

• ✓ Pharmacy

• ✓ TUSLA (Irish government)Purchase date: PC date: Acquisition cost: Size:

May 2020

WAULT: Rent review: BER rating :

Q1 2022 £16.1m (€18.0m) 5,333 sqm 28.8 years Irish CPI A3

Enniscorthy, County Wexford, Ireland

Tenants

• ✓ Health Service Executive (HSE)

• ✓ GP Practice

• ✓ Tusla

• ✓ PharmacyPurchase date: PC date: Acquisition cost: Size:

December 2020

WAULT: Rent review: BER rating:

Q1 2022 £11.2m (€12.6m) 4,633 sqm 25 years Irish CPI A3

Eastbourne Primary Care Centre, East Sussex

Tenants ✓ GP Practice ✓ PharmacyPurchase date: PC date: Acquisition cost: Size:

Number of GPs: Patients: WAULT: Rent review: BREEAM rating:December 2019 Q2 2021 £8.4m 1,976 sqm 13 23,317 25 years OMV Excellent

Epsom, Surrey

Tenants ✓ GP Practice

Purchase date: PC date: Acquisition cost: Size:

Patients: No of GPs: WAULT: Rent review: BREEAM rating:March 2020 Q2 2021 £4.0m 831 sqm 10,000 4 20 years OMV

Very Good

DIRECT DEVELOPMENTS

• ✓ Acquired as part of internalisation of management structure

• ✓ Strong pipeline of opportunities totalling £80m at varying stages of progression, including two advanced schemes totalling £10m due to be on site in 12-18 months

• ✓ Undertaking non-speculative developments on its balance sheet should provide a greater yield on cost and potential valuation uplift

• ✓ Development team has a strong track record of managing the delivery of primary care assets and will expand the Company's future development capability

New Primary Care Centre, Lincolnshire

New Primary Care Centre, West SussexForward pipeline in the UK

Tenant ✓ GP PracticeDevelopment cost: Size:

£4.0m

905 sqm

No. of GPs: Patients: WAULT: Rent review: BREEAM rating :

4

7,500 rising to 10,000

25 years

OMV ExcellentTenants ✓ GP Practice ✓ Pharmacy

Development cost: Size:

£6.5m

1,440 sqm

Number of GPs: Patients: WAULT: Rent review: BREEAM rating:

8

12,000 rising to 25,000

25 years

OMV ExcellentTen schemes at various stages of progression

Combined capital value of around £70m, average lot size £7m

Combined GIA of 13,600 sqm, average GIA of 1,360 sqm

Proposed occupiers are GP Practices within reimbursement

Majority of schemes in the south of England

STRONG PIPELINE OF ACQUISITIONS, DEVELOPMENTS AND ASSET MANAGEMENT PROJECTS

Funds deployed across 23 standing investments, 6 forward funded developments and 12 asset management projects

• • £100m proceeds from September 2019 equity raise successfully deployed

Region

Number

Acq'n/dev't cost

UK

27

£82mIreland

2 12

£21m (€23m)

Asset management

£4m

Total funds deployed since September 2019 c. £107m

Total funding requirement of c.£243m over the next 2-3 years to fund a mix of future acquisition pipeline, Nexus Developments and asset management projects

Short-term pipeline ofactive opportunities, include:

Active management of existing assets to create additional value

Region

UKNumber 10

Est. acq'n/dev't cost £75mIreland

5 12

£54m (€60m)

Direct Developments

£80mProperty

NumberAsset Management costBoard approved

23

£10mAdvanced pipeline

59

£24m

• • Further medium-term pipeline opportunities

Funding requirement

Estimated pipeline of c.£129m (including £59m under offer)

Direct Developments £80mEstimated capex on projects in FY21 and FY22 of c.£34m

PROPERTY PORTFOLIO OVERVIEW

Key Figures1	31 December 2020
Total number of properties Including properties in Ireland Investment portfolio value (£bn) Floor area (000's sqm) Capital value (£ per sqm) Contracted rent roll (£m) Net initial yield (NIY) Average lot size (£m) Average WAULT (years) Occupancy Government backed rent	513 18 2.58 680 3,781 135.2 4.81% 5.0 12.1 99.6% 90%

Capital Value 1	Number	Value (£m)	%
> £10m	48	709	28%
£5m - £10m	124	856	33%
£3m - £5m	154	603	23%
£1m - £3m	182	398	16%
< £1m (incl. land £1.5m)	5	6	0%
Total	513	2,572	100%

1. All data as at 31 December 2020

HIGH QUALITY RECURRING INCOME

Key characteristics of the portfolio

...these characteristics result in highly visible cash flows and stable valuation yields

• ✓ Contracted rent roll of over £135.2m p.a.

• ✓ FY 20 - L4L rental growth from rent reviews and asset management projects of £2.0m or 1.6% (FY19: £1.9m or 1.5%)

• ✓ Marginal reduction in rate of rental growth and outlook becoming more muted for pharmacy rents as the consequences of COVID-19 become more apparent

• ✓ Only £5.3m or 3.9% of rent roll expiring in next three years: of which £4.2m is subject to a planned asset management initiative or terms have been agreed to renew the lease

LONG LEASES WITH RENTAL GROWTH POTENTIAL

•

•

Effectively upward only rent roll in UK
Total weighted average rental growth 1.8% p.a.
✓ 69% reviewed to open market (ave. 1.3% p.a.)	•	Increased development activity
✓ 25% index linked (ave. 2.3% p.a.)	•	Building cost inflation
✓ 6% on fixed uplift (ave. 2.9% p.a.)	•	Reducing the NHS carbon footprint
•	Building regulations and specification creep
•	Replacement cost

Drivers of rental growth

• • Completion of historic rent reviews - increased momentumRental growth history

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

ASSET MANAGEMENT - ENHANCING EXISTING PORTFOLIO

✓ 24 projects either completed or on-site in year investing £8m, £0.3m additional rent and WAULT extended back to 20 years ✓ Strong pipeline of over 80 projects either Board approved or advanced negotiations investing c. £34m, £1.1m of additional rent and WAULT extended back to 21 years

Derby Road, Nottingham

Hoveton and Wroxham Medical CentreMillwood Surgery, Bradwell

The Old Court House Surgery, Sutton

Extension to provide 7 new consulting rooms increasing floor space by 20% to meet local demand. Energy efficiency improvements being made to the enlarged building.

Completion date: March 2021

Capex:	£0.8m	Capex:	£1.2m	Capex:	£1.5m
Additional Rent:	£42,000 pa	Additional Rent:	£55,000 pa	Additional Rent:	£36,500 pa
New Lease:	21 years	Capex:	£0.9m	New Lease:	23 years	New Lease:	20 years
Size:	1,016 sqm	Additional Rent:	£18,000 pa	Size:	234 sqm	Size:	130 sqm
Patients:	12,000	New Lease:	20 years	Patients:	19,000	Patients:	13,000
Number of GPs:	7	Size:	110 sqm	Number of GPs:	8	Number of GPs:	9
Patients:	9,000
Number of GPs:	8

To meet the needs of the patients the current dispensary is being extended at the front of the building and a 2-storey extension is being built to create 2 additional consulting rooms on the ground floor and 2 large administration rooms on the first floor.

Completion date: Est. June 2021

PHP have fully funded a 234 sqm GIA two-storey building extension, creating 6 additional clinical rooms on both ground and first floor levels for the GPs, alongside an internal refurbishment.

Completion date: Est. August 2021

PHP funded the works to refurbish the existing space and create additional clinical rooms on the first floor using the existing vacant expansion space.

Completion date: September 2020

ESG: PREMISES, HEALTH AND PEOPLE

Built Environment

• • Supporting the NHS target to be Carbon Net Zero by 2045 and interim reduction of 80% by 2036-2039

• • All acquisitions to have an EPC rating of C or better

• • In the UK, all new developments to have a BREEAM rating of 'Excellent' and in Ireland, all new developments to have a BER(1) rating of A3 or better.

• • All future asset management to be assessed in line with BREEAM, with a focus on undertaking measures to mitigate energy usage and improve the EPC rating to at least B or better (81% of portfolio currently rated C)

• • Reduce scope 1 and 2 GHG emissions by 25% in absolute and 40% in intensity terms

• • Green lease clauses to be standard in all new lettings and lease renewals

Community Impact

• • ESG Policy published setting out our commitment and approach to responsible business

• • Community impact fund established - £250k p.a. for social and charitable activities linked to the communities and services of our occupiers

Responsible Business

• • Joined Real Estate Balance, an association that seeks to address gender imbalance in the real estate sector

• • Good governance practices adopted including transparency of our business to all stakeholders

• • ESG committee became a full committee of the Board reflecting the Company's commitment to environmental, social and governance matters

1 Building energy rating

DEBT SUMMARY

• • Broad and diverse range of lending partners

  Euro private placements £110m/€121m (7%)

• • Long weighted average debt maturity of 7.6 years

• • 100% of debt fixed or hedged for a weighted average maturity of 7.4 years

• • Total debt facilities of £1.46bn (90% secured/10% unsecured)

• • Drawn net debt £1.1bn

• • £361m of undrawn headroom after capital commitments

• • Group LTV 41.0% (35.2% excluding £150m convertible bond)

• • Average cost of debt 3.5% falling to 3.1% assuming fully drawn

• • Marginal cost of debt 1.7%

Debt maturity profile

25 YEAR TRACK RECORD OF DIVIDEND GROWTH

7.0

6.0

5.0

1997

Implied PHP 2021 dividend yield2
Share Price3	Yield
147p	4.2%

Historic dividend progression CAGR 8.9%

6.20p

4.0

3.0

2.0

1.0

0.0

1998

1999

2000

2001

2002

2003

Historic dividend cover

2004

2005

2006

2007

150% 100% 50% 0%

2011

2012

• 1. CAGR: 1997 to 2021

  2013

  2014

  2015

  2016

  Dividend cover

  2017

  2018

  2019

• 2. Based on Q1 2021 dividend of 1.55p declared per share annualised and is illustrative only

• 3. Share price is the closing mid market price on 16 February 2021

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2020

• ✓ Q1 2021 dividend of 1.55p per quarter paid or declared (equivalent to 6.2p annualised) a 5.1% increase and 25th year of growth

• ✓ 2020 dividend cover at 100%

• ✓ Total dividends paid increased by 23.4% in 2020

2021

CONCLUSION - INVESTMENT HIGHLIGHTS

One of the UK's largest primary health property investors

Low risk, long-term, low volatility market

Proven business model with strong management

• • One of the UK's largest listed primary health property investors with 513 properties valued at £2.6 billion

• • FTSE 250 UK REIT with market capitalisation of c. £2.0 billion and improved share liquidity

• • Underlying investment characteristics and strong portfolio metrics continue to reflect the secure, long-term predictable income stream

•

• • Continued disciplined approach to acquisitions and asset management initiatives avoiding asset obsolescence

• • Continued opportunities in the UK and Ireland

• • 90% of income funded by government bodies (NHS or HSE) on long lease terms - WAULT of 12.1 years

•

• • Positive yield gap between acquisition yield and funding costs

• • Effectively upward-only or indexed rent reviews in UK with improving outlook

• • Rent reviews in Ireland indexed linked to Irish CPI

• • Simple and transparent cost structure enhancing earnings

•

• • Continued organic rental growth from rent reviews and asset management projects

• • Proactive approach to refinancing to access lower cost of funds over the medium term with 50bp of savings delivered post MedicX merger

• • Low marginal cost of finance at 1.7% will reduce average cost of finance in future

• • EPRA cost ratio the lowest in the UK REIT sector

•

• • Healthcare demand increasing due to ageing and growing populations in the UK and Ireland

• • Unwavering political support in UK and Ireland and promotion of integrated care

• • Historic underinvestment in primary care estate - in need of replacement and modernisation

• • Covid-19 - will create more opportunities in the future, more investment in health care with more procedures and consultations taking place in primary care facilities

•

• • Proven track record of successfully identifying and investing in new assets on attractive terms to grow the portfolio

• • Consistently maintained high level of occupancy - currently 99.6%

• • Experienced management team with corporate, financial, property, investment and NHS experience

POSITIVE YIELD GAP

Illustrative yield gap on property investmentUK acquisitions

6.0%

5.0%

4.8%

4.0%

3.0%

2.0%

1.0%

0.0%

Valuation yield*

10 year Libar Swap Rate**Average debt margin***

* PHP portfolio valuation yield 31 December 2020 (used as proxy for market purchases) ** Sourced from Chatham Financial - 9 February 2021 *** Company incremental margin on debt facilities

2.9%

Income return after interest

Ireland acquisitions

6.0%

5.0%

4.0% 3.0% 2.0%

1.0%

0.0%

5.1%

0.30%

Valuation yield*

1.6%

10 yr Euribor Swap Rate**Average debt margin***Income return after costs

PRIMARY HEALTH CARE OPPORTUNITY IN THE UK

• • The UK population has been steadily getting older and this trend is projected to continue in the future.

• • By 2066, it is estimated there will be a further 8.6 million UK residents aged 65 years and over, an increase broadly equivalent to the size of the population of London today, taking the total number in this group to 20.4 million and making up 26% of the total population.

• • Meanwhile, the NHS is adopting a new service model where, amongst other targets, patients get joined-up care, including the right to online digital GP consultations.

• • This includes the creation of Integrated Care Systems ("ICS"), that will focus on 'collaboration rather than competition' and bring together budgets that were previously 'siloed' to better serve the overall healthcare needs of a local population.

• • At the same time, GP practices have been encouraged to form Primary Care Networks ("PCN's"), typically covering 30-50,000 people, to deliver integrated services at scale.

• • To encourage this, Practices will be funded to work together and create genuinely integrated teams of GPs, community health and social care staff.

• • Over the next five years, investment in primary medical and community services will grow faster than the overall NHS budget, with a ringfenced local fund worth at least an extra £4.5 billion a year in real terms by 2023/24

• • However many GP Premises in the UK remain unfit for their current purpose, let alone this expanded role.

PRIMARY HEALTH CARE OPPORTUNITY IN THE UK

• • Common challenges include lack of space in waiting rooms and consultation rooms, growing list sizes and lack of disabled access.

• • The Covid-19 crisis undoubtedly accelerated the intended transition away from initial face to face GP consultations, with various estimates suggesting c. 85% are currently being conducted remotely.

• • Nonetheless, PHP does not believe this level is sustainable for long periods of time. For example, it is estimated that c.10m people could be waiting for treatment by the end of the year and the number of people waiting more than a year for routine procedures has risen from c. 1,600 before the pandemic to nearly 200,000 today.

• • PHP believes that primary health premises have a vital short term role to play in alleviating some of the immediate consequences of Covid-19, including the delivery of some of the backlog of treatments as well as new challenges, such as treating 'long Covid'.

• • This includes the delivery of some of the backlog of treatments, testing and, potentially, vaccination in due course as well as the resumption of more, but not all, consultations in a face to face format.

• • Over the medium to longer term, PHP believes its modern, purpose built premises and its program of active asset management, means its assets are well placed to benefit under the new ICS from the shift of services away from acute hospitals into the community setting.

• • This is in line with fundamental demographic trends and NHS plans, including funding, for primary care to deliver integrated services and 'operate at scale'.

STRONG TRACK RECORD OF RELATIVE PERFORMANCE

• • IRR over period since inception of 13.3%1 (Average annual inflation (RPI) over period: 2.7%)

CAGR total shareholder returns

PHPAssuraEPRA UK

6 months

• 1 year

• 3 years

• 5 years

  • 10 years

  • 20 years

(1.0%)

(0.8%)

14.3%

12.3%

11.8%

• (0.6%) 26.6%

• 2.5% (20.4%)

• 10.9% (1.8%)

• 11.7% (2.3%)

• 10.2% 6.6%

14.1% - 3.2%

PHP TSR P(aHbPsToSlRu(taebscohluatencghea)n-ge6) -m1ytrh/s3y/r/15yyrr/ 3yr/ 5yrPHP 5 year relative TSR performance

PHP TPHPPRTvPsRMvsSMCSICUI UKKMontthhlylyPrPoproerptyeIrntdyeIxndex

Source: all data sourced from Thomson Reuters EIKON as at close 31 December 2020; IMSCI UK Monthly Property Index

1

10% 8% 6% 4%

8.4%

2%

0% -2%

PHPMSCI UK Monthly Property Index

IRR includes total dividends paid to 20 November 2020 of 88.85 pence and assumes the sale of the underlying ordinary shares at 152.6 pence, the closing mid market price as at 31 December 2020, having been issued at 25 pence (dividend and share issue price data adjusted where required to reflect four for one share sub-division in November 2015)

BALANCE SHEET
£m	31 Dec. 20	31 Dec.19
Investment properties	2,576.1	2,413.1
Cash	103.6	143.1
Debt	(1,159.3)	(1,210.4)
Net debt	(1,055.7)	(1,067.3)
Other net current liabilities	(35.1)	(33.0)
Adjusted net tangible assets (NAV)	1,485.3	1,312.8
Convertible bond fair value adjustment	(25.0)	(22.7)
Fixed rate debt and swap MtM	(42.4)	(58.5)
Deferred tax	(3.5)	(3.1)
IFRS net assets	1,414.4	1,228.5
Fixed rate debt MtM adjustment	(87.9)	(49.0)
EPRA NDV (NNNAV)	1,326.5	1,179.5
Loan to value	41.0%	44.2%
Adjusted NTA per share (pence)	112.9p	107.9p
IFRS NAV per share (pence)	107.5p	101.0p
EPRA NDV per share (pence)	100.8p	97.0p
Number of shares (millions)	1,315.6	1,216.3

SPREAD OF FUNDING SOURCES

Secured facilities 3
Provider	Santander	RBS1	HSBC	Lloyds	Barclays	Aviva	Secured bond	Aviva One Medical	Secured bond
Tenor	Bullet	Bullet	Bullet	Bullet	Bullet	Bullet	Bullet	Amortising	Bullet
Expiry	Jul-2021	Mar-2022	Nov-2023	Dec-2023	Dec-2023	Dec-2022	Dec-2025	Nov-2028	Mar-2027
Facility	£31m	£100m	£100m	£50m	£100m	£25m	£70m	£25m	£100m
Drawn	£nil	£59m	£nil	£29m	£nil	£25m	£70m	£25m	£100m
Collateral2	£68m	£230m	£187m	£102m	£209m	£46m	£135m	£53m	£194m
Contracted rent	£3m	£12m	£9m	£5m	£10m	£2m	£7m	£3m	£10m
LTV Max	65%	55%	67.5%	65%	60%	70%	74%	65%	70%
LTV actual	n/a	26%	n/a	28%	n/a	54%	52%	47%	52%
ICR Min	1.75x	1.5x	2.0x	1.75x	1.5x	1.6x	1.15x	1.1x	1.15x
ICR actual	n/a	7.5x	n/a	7.2x	n/a	2.7x	4.4x	1.8x	3.4x
Valuation fall to breach	£68m	£122m	£187m	£58m	£209m	£11m	£40m	£14m	£51m
Income fall to breach	£3m	£9m	£9m	£3m	£11m	£1m	£5m	£1m	£6m

• 1. Excludes unsecured £5m overdraft facility

• 2. Includes only assets mortgaged to the applicable facility

• 3. All data as at 31 December 2020

SPREAD OF FUNDING SOURCES (CONTINUED)

Secured facilities 3	Unsecured facilities 1	Cash/ Unfettered assets	Total
Provider	Aviva	Ignis	Standard Life	Aviva	Euro PP (€)	Euro PP (€)	Aviva	Aviva	Convertible bond
Tenor	Bullet	Bullet	Bullet	Bullet	Bullet	Bullet	Amortising	Amortising	Bullet
Expiry	Nov-2028	Dec-2028	Sept-2028	Aug-2024 Aug-2029	Dec-2028 Dec-2030	Sept 2031	Jan-2032	Sept-2033	Jul-2025
Facility	£75m	£50m	£78m	£110m	£46m (€51m)	£62m (€70m)	£20m	£260m	£150m	-	£1,452m
Drawn	£75m	£50m	£78m	£110m	£46m (€51m)	£62m (€70m)	£20m	£260m	£150m	(£103m)	£1,056m
Collateral2	£142m	£91m	£138m	£206m	£79m	£108m	£49m	£446m	-	£93m	£2,576m
Contracted rent	£7m	£5m	£7m	£11m	£4m (€5m)	£6m (€7m)	£3m	£23m	-	£8m	£135m
LTV Max	70%	74%	74%	65%	70%	70%	70%	75%	-	-
LTV actual	53%	55%	56%	53%	58%	58%	42%	58%	-	-
ICR Min	1.6x	1.15x	1.65x	1.2x	1.15x	1.15x	1.6x	1.4x	-	-
ICR actual	3.2x	2.5x	2.5x	2.0x	4.0x	6.8x	2.0x	2.0x	-	-
Valuation fall to breach	£34m	£23m	£33m	£37m	£14m	£22m	£19m	£100m	-	£197m	£1,239m
Income fall to breach	£4m	£3m	£2m	£4m	£3m	£5m	£1m	£7m	-	£8m	£85m

• 1. Excludes unsecured £5m overdraft facility

• 2. Includes only assets mortgaged to the applicable facility

• 3. All data as at 31 December 2020

EPRA COST RATIO

Year ended 31 December 2020	Year ended 31 December 2019
£m	£m
Gross rent less ground rent and service charge income	134.6	118.3
Direct property expense	7.8	5.6
Administrative expenses	11.6	10.5
Performance incentive fee ("PIF")	1.6	1.8
Less: service charge costs	(4.3)	(2.8)
Less: ground rent	(0.2)	(0.2)
Less: other operating income	(0.4)	(0.7)
EPRA costs (including direct vacancy costs)	16.1	14.2
EPRA cost ratio	11.9%	12.0%
Administrative expenses as a percentage of gross asset value (annualised)	0.5%	0.4%

70.0%

60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

RENT REVIEW RESULTS

• • £1.7m (1.8% p.a.) increase from 309 rent reviews completed

• • 1.3% p.a. achieved on 159 open market value reviews

• • 2.3% p.a. achieved on 137 indexed linked reviews

• • 2.9% achieved on 13 fixed reviews

• • 669 open market value reviews outstanding with ERV £90.4m or uplift of £2.2m equivalent to 0.8% p.a.

Outstanding reviews focused by region
London and South East	36%
North	25%
Midlands	18%
South West	5%
Wales	9%
Scotland	6%
Ireland	1%
100%

12 months to 31 December 2020	OMV Rent reviews completed	Number of outstanding reviews (current rent)
No	%	No	£m
Reviews relating to calendar years:
2012	-	-	3	0.4
2013	4	0.9%	3	0.4
2014	4	2.0%	2	0.3
2015	16	3.2%	27	3.1
2016	15	1.4%	44	6.7
2017	24	1.5%	52	7.9
2018	25	1.5%	123	16.8
2019	22	1.8%	207	26.6
2020	1	2.4%	208	28.2
111	1.8%	669	90.4
Nil increases	48	0.0%
Total OMV reviews	159	1.3%

CONTACT DETAILS

Harry Hyman	Richard Howell	Chris Santer	David Bateman
Chief Executive	Chief Financial Officer	Chief Investment Officer	Investment Director
harry.hyman@	richard.howell@	chris.santer@	david.bateman@
phpgroup.co.uk	phpgroup.co.uk	phpgroup.co.uk	phpgroup.co.uk

DISCLAIMER

This document comprises the slides for a presentation in respect of Primary Health Properties PLC (the "Company") and its 2020 annual results presentation (the "Presentation").

No reliance may be placed for any purposes whatsoever on the information in this Presentation or on its completeness. The Presentation is intended to provide a general overview of the Company's business and does not purport to deal with all aspects and details regarding the Company. Accordingly, neither the Company nor any of its directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance may be placed on, the fairness, accuracy or completeness of the information contained in the Presentation or the views given or implied. Neither the Company nor any of its directors, officers, employees or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith.

This Presentation is not a prospectus or prospectus equivalent document and does not constitute, or form part of, nor is it intended to communicate, any offer, invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract for any such sale, issue, purchase or subscription. This Presentation does not constitute a recommendation regarding the Company's securities.

Certain statements in this Presentation regarding the Company are, or may be deemed to be, forward-looking statements (including such words as "believe", "expect", "estimate", "intend", "anticipate" and words of similar meaning). These forward-looking statements are neither historical facts nor guarantees of future performance. Such statements are based on current expectations and belief and, by their nature, are subject to a number of known and unknown risks, uncertainties and assumptions which may cause the actual results, events, prospects and developments of the Company and its subsidiaries to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except as required by applicable law or regulation, the Company (nor its members, directors, officers, employees, agents or representatives) undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The contents of the Presentation have not been examined or approved by the Financial Conduct Authority ("FCA") or London Stock Exchange plc (the "London Stock Exchange"), nor is it intended that the Presentation will be so examined or approved. The information and opinions contained in the Presentation are subject to updating, completion, revision, further verification and amendment in any way without liability or notice to any party. The contents of this Presentation have not been independently verified and accordingly, no reliance may be placed for any purpose whatsoever on the information or opinions contained or expressed in the Presentation or on the completeness, accuracy or fairness of such information and opinions. No undertaking, representation or warranty or other assurance, express or implied, is made or given as to the accuracy, completeness or fairness of the information or opinions contained or expressed in the Presentation and, save in the case of fraud, no responsibility or liability is accepted by any person for any loss, cost or damage suffered or incurred as a result of the reliance on such information or opinions. In addition, no duty of care or otherwise is owed by any such person to recipients of the Presentation or any other person in relation to the Presentation. The material contained in this Presentation reflects current legislation and the business and financial affairs of the Company, which are subject to change without notice.

This Presentation summarises information contained in the 2020 full year results. No statement in this Presentation is intended to be a profit forecast and no statement in this Presentation should be interpreted to mean that earnings per Company share for current or future financial years would necessarily match or exceed the historical published earnings per Company share. Past share performance cannot be relied on as a guide to future performance.

February 2021