The second top pick comes from JP Morgan, which has Primary Health Properties (LSE:PHP) in its sights. This unique real estate investment trust (REIT) landlord owns one of the largest portfolios of properties used by private healthcare professionals as well as the NHS. Think GP surgeries, pharmacies, dental clinics, etc.
With the bulk of its leases government-backed, the company’s long since enjoyed highly stable and predictable cash flows linked to inflation. And subsequently, management’s been able to deliver dividend hikes for more than 25 consecutive years.
Like many REITs, Primary Health Properties has seen its share price come under significant pressure in recent years. After all, higher interest rates don’t exactly create an ideal environment for landlords with lots of mortgage debt.
Nevertheless, given the nature of the firm’s clientele and the perceived strength of its cash flows, the analysts at JP Morgan have put their share price target at 114p. Compared to where the stock trades today, that’s a 17% potential capital gain paired with a tasty-looking 7.3% dividend yield.
However, there are still some crucial risks to consider.
Having the NHS as a primary tenant can be advantageous. But it also means that budget cuts and policy changes can be quite disruptive. It could even lead to lease agreements not being renewed. And since finding new tenants for specialised healthcare facilities isn’t easy, occupancy could come under pressure along with cash flows.
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.
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Over the last six months, the FTSE 250 has enjoyed some strong performance, climbing by more than 14%. However, not all of its constituents have been so fortunate, such as Primary Health Properties (LSE:PHP).
Like many other businesses in the real estate sector, the healthcare-focused landlord has suffered from generally weak investor sentiment, resulting in the share price slipping back below £1. Yet despite this, dividends have continued to flow. And as a result, the REIT now offers a tasty-looking 8% dividend yield.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of advice.
Impressive dividends
As a quick crash course, Primary Health Properties is one of the biggest healthcare landlords in the UK. It owns and leases a diversified portfolio of GP surgeries, pharmacies, and dental clinics primarily to the NHS.
With a government entity being one of its largest tenants, the company has enjoyed fairly resilient and predictable cash flows over the years. And it’s one of the main reasons why, despite the challenges within the real estate sector, the group has continued to reward shareholders with ever-increasing dividends for more than 25 years in a row.
But if that’s the case, why are investors seemingly not rushing to capitalise on the stock’s impressive yield?
Headwinds and challenges
Even with a resilient business model, the group has encountered several challenges both internally and externally. It’s no secret that higher interest rates have created numerous headaches for property owners, especially REITs that often carry significant debt burdens.
In the case of Primary Health, the group’s rental cash flows have continued to grow steadily, but rising debt costs have increased the pressure on net earnings.
At the same time, management’s contending with some protracted rent increase negotiations with the NHS. Should these talks fail, its currently impressive 99.1% occupancy might start to slip alongside its net rental income. After all, finding new tenants in the healthcare niche can be a bit trickier compared to the residential sector.
With that in mind, it’s not surprising that investors aren’t as keen to buy shares while the macro environment remains unfavourable.
Still worth considering?
The continued pressure of financing costs and delays in rent revaluations indicates that margins are at risk of being squeezed. This could also hinder rental income growth, squeezing the coverage of existing dividends and any potential future growth.
Nevertheless, the business continues to have an ace up its sleeve. Primary Health ultimately benefits from structural long-term demand for primary healthcare infrastructure. And that’s an advantage that doesn’t change even during economic downturns.
The balance sheet does carry a large chunk of debt. But it appears to remain manageable. And with interest rate cuts steadily emerging, the pressure from its outstanding loans should slowly alleviate over time while simultaneously helping boost the value of its property portfolio.
That’s why, despite the risks, I think this FTSE 250 REIT’s worth a closer look
I’ve been doing a bit of research on the habits of successful passive income investors, and I came across a bit of a surprise
Yes, real estate has been profitable for a number of people. But I had a very shaky venture into it. And it has a fair few drawbacks for individual investors.
Not really passive
One is that many of us won’t have the capital to go for, say, rental properties. It’s not the kind of thing we can get started with just a few hundred pounds, like we can with a Stocks and Shares ISA.
It’s not entirely passive either. Finding tenants, collecting rent consistently, and maintenance all take time and effort. And the latter can sometimes prove very costly if you’re unlucky.
But there’s a way we can get into real estate without facing those major hurdles. And that’s to consider buying real estate investment trusts (REITs). They’re investment companies that put their money into various kinds of properties, and they do all the management. All we have to do is buy shares in them, just as we do with shares in general
Healthy property
I like Primary Health Properties (LSE: PHP), which invests in GP surgeries, pharmacies, dental clinics. Importantly, they’re mostly rented to the NHS on long-term leases.
Having the UK government as its main customer provides some stability and predictability. But it hasn’t made the trust immune to weak property values in recent times. Over the past five years, the PHP share price has fallen 35%.
Higher interest rates are a burden, especially with debt on the books. At the end of the first half this year, net debt reached £1,367m, up from £1,323m in December 2024. There doesn’t seem to be any liquidity problem, but it could keep the shares down for longer.
Big dividends
On the bright side, a lower share price means a bigger dividend yield. Right now, we’re looking at a forecast 7.3%. And analysts are forecasting rises between now and 2027. We could have long-term capital appreciation too — especially when interest rates fall.
There are plenty of other REITs to choose from, addressing different sectors of the property market.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
Millionaire style
Quite a few millionaire investors also invest for deferred income. That is, they aim for total returns — capital and dividends — and plan to convert it to income later.
Whilst all days are good days for a dividend investment plan, some days are better than others.
Dividends can be more reliable than share prices as they’re driven by the companies performance itself and not by the whim of investors.
As part of a total return / reinvestment strategy, this income could be reinvested into income assets or back into the equity market depending on the relative valuations.
The emotional benefits of dividend re-investment. In fact, with this investment strategy you can actually welcome falling share prices.
TMPL is in the Snowball as a pair trade, where a low yield Trust is paired with a high yield Trust to maintain a blended yield of 7%.
TMPL could be sold if it prints a profit and re-invested in a higher yielding Trust or if not more shares could be bought using the Snowball’s dividend stream.
I will buy another 1k today, bringing the total to 3k as it’s xd this week.
THIRD INTERIM DIVIDEND
The Board of the Company has today declared its third interim dividend for the year ending 31 December 2025 of 3.75p per ordinary share (2024: 3.00p per ordinary share).
As described in the Company’s Annual Report for the year ended 31 December 2024, this dividend includes a 0.75p per ordinary share enhancement reflecting the Board’s decision to distribute an element of the returns earned from share buybacks within the Company’s portfolio.
It is the Board’s current intention, in the absence of unforeseen circumstances, to pay one more dividend of at least 3.75p per ordinary share in respect of the current financial year. This has raised the prospective dividend yield on the Company’s shares to 4.1%.
The third interim dividend will be paid on 30 December 2025 to those shareholders registered at the close of business on 21 November 2025.
The ordinary shares will trade ex-dividend from 20 November 2025.
Current price £3.67, most probably cheaper later today, a yield of 4%.
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I’ve sold TRIG for a profit of £1,185.00 including the earned dividend but not yet received. There might be, in time, more profit from the Trust but the Snowball is and always will be about earning and re-investing dividends.
Because the Trust was a recent addition to the Snowball the ARR is 9,183.75%, which is only chewing gum for the eyes as it’s not repeatable.
Cash to invest £11,367.00. I might put the profit into TMPL and buy LAND as it’s xd this week.
HICL Infrastructure – Combination of HICL and TRIGDate/Time:17/11/2025 07:00:38 ▼
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
The information contained in this announcement is deemed inside information under Article 7 of the UK Market Abuse Regulation. Upon publication, this inside information is in the public domain.
17 November 2025
For immediate release
Combination of
HICL Infrastructure PLC (“HICL”)
and
The Renewables Infrastructure Group Limited (“TRIG”)
· HICL and TRIG to combine to create the UK’s largest listed infrastructure investment company with net assets in excess of £5.3 billion
· Reinvigorated investment strategy enabling investment across the full spectrum of infrastructure, including core and renewables sectors, opening access to new growth assets and subsectors aligned with key infrastructure megatrends
· Diversified and resilient cash flows supporting an initial dividend target of 9.0 pence per share and compelling target NAV total return of over 10 per cent. per annum over the medium term
· Continuity of leading specialist investment management and renewables operational management teams, ensuring consistent stewardship and expertise in delivering the enhanced investment strategy
· Combination to be implemented through the reconstruction and voluntary winding up of TRIG, with TRIG’s assets transferred to HICL in exchange for the issue of new HICL shares and cash
· £350 million liquidity package, comprising a partial cash option of up to £250 million for TRIG shareholders and a further £100 million commitment from Sun Life, which has agreed terms to provide liquidity and secondary market support for the Combined Company through the purchase of ordinary shares following completion of the Combination
· Targeting completion date in Q1 2026, subject to shareholder, regulatory and other approvals
Summary
The Boards of HICL and TRIG are pleased to announce that, following extensive engagement between the two companies and a positive market sounding with large shareholders of both companies, they have signed detailed heads of terms in relation to a combination of the two companies (the “Combination“) to create the UK’s largest listed infrastructure investment company (the “Combined Company“).
The Combined Company will have an enhanced investment mandate covering the full spectrum of infrastructure opportunities, reflecting the convergence of traditional core infrastructure and energy transition assets. An initial annual dividend target of 9.0 pence per share will underpin a target NAV total return of over 10 per cent. per annum over the medium term, alongside a progressive dividend.
The Boards believe that the Combination offers strong strategic, operational and financial benefits for all shareholders, strengthening the already attractive investment cases of both companies and creating a more compelling proposition in the form of the Combined Company. Together, the Boards see an opportunity to create the premier UK listed infrastructure investment company, with greater scale, liquidity and relevance to a broader investor base.
The Combination will be implemented by way of the reconstruction and voluntary winding up of TRIG under Guernsey law, pursuant to which the assets of TRIG will transfer to HICL in exchange for the issue of new HICL shares (“HICL Shares“) and cash, enabling holders of TRIG shares (“TRIG Shares“) to elect for a partial cash exit (the “Scheme“).
Key terms of the Combination include:
– Issue of new HICL Shares: HICL will issue new HICL Shares to TRIG shareholders on a formula asset value-for-formula asset value (FAV-for-FAV) basis, with the exchange ratio determined by reference to the respective 30 September 2025 NAVs of HICL and TRIG. By way of illustration, applying the latest published NAVs for each company results in an illustrative exchange ratio of approximately 0.714173 of a HICL Share for each TRIG Share¹.
– Cash option: TRIG shareholders will have the option to elect for a partial cash exit of up to £250 million in aggregate, representing approximately 11 per cent. of TRIG’s issued share capital, priced at a 10 per cent. discount to the 30 September 2025 TRIG NAV per share, adjusted for any share buybacks undertaken and dividends declared after that date².
– Sun Life secondary market investment: Sun Life, the parent company of InfraRed Capital Partners (“InfraRed“), has agreed terms on which it will provide liquidity and secondary market support for the Combined Company by purchasing £100 million of ordinary shares following completion of the Combination.
Applying the illustrative exchange ratio above, and assuming full take-up of the £250 million partial cash option, HICL shareholders are expected to hold approximately 56 per cent. and TRIG shareholders approximately 44 per cent. of the Combined Company’s issued share capital on completion of the Combination.
Prior to completion of the Scheme, both TRIG and HICL will continue to maintain their existing quarterly dividend schedules, with dividends for the quarter ended 30 September 2025 to be paid in the ordinary course, including the third interim dividend of 1.8875 pence per share declared by TRIG on 6 November 2025. Following completion, quarterly dividends are intended to commence at the new higher annual rate of 9.0 pence per share. Dividends to be declared for the quarters ending 31 December 2025 and 31 March 2026 (subject to the timing of completion) and for the full financial year ending 31 March 2027, are expected to reflect this increased level.
InfraRed, which acts as Investment Manager to both HICL and TRIG, will continue in that role for the Combined Company, ensuring consistent stewardship of the combined portfolio and the expertise required for the delivery of the reinvigorated investment strategy. Renewable Energy Systems (“RES“) will continue to provide operational services for renewables assets within the portfolio, as it has done for TRIG since its launch in 2013.
Completion of the Combination remains subject to agreement of the final form documentation, approval by the Financial Conduct Authority (the “FCA“) of HICL’s prospectus and proposed new investment policy, shareholder approval at the general meetings of both companies, foreign direct investment clearances and other regulatory approvals, certain third party project level consents, lender consents and admission of the new HICL Shares to the FCA’s Official List and to trading on the London Stock Exchange’s Main Market for listed securities.
It is anticipated that documentation in connection with the Combination will be posted to shareholders later this week and general meetings are expected to be held in December 2025. Completion of the Scheme (the “Effective Date“) is expected to occur in Q1 2026.
The Directors of both HICL and TRIG have provided irrevocable undertakings to vote in favour of the Combination at the respective shareholder meetings in respect of their holdings of HICL and TRIG Shares. In addition, the Directors of TRIG have confirmed that they will not elect for the Cash Option (as defined below).
Mike Bane, Chair of HICL, commented:
“The combination of HICL and TRIG represents a unique opportunity to capture the key megatrends shaping the infrastructure market today, which increasingly straddle both core infrastructure and the energy transition. By combining two complementary portfolios and teams, the combined company will have the profile, expertise and access to capital to seek enhanced returns from a reinvigorated investment strategy.”
Richard Morse, Chair of TRIG, commented:
“This is a combination that we believe offers a transformational opportunity to drive growth and deliver a resilient, forward-looking investment proposition. Together, HICL and TRIG will form the UK’s largest listed infrastructure and renewables investment company, with the scale, liquidity, and balance sheet strength to better access a broader range of global opportunities and deliver sustainable long-term value for shareholders.”
