It’s official: after weeks of speculation, UK Prime Minister Keir Starmer has formally resigned, creating uncertainty for real estate investment trusts (REITs). The direct and indirect impacts could be far reaching, affecting everything from interest rates to government policy on particular property sectors.
The smart money is on new Labour MP Andy Burnham becoming Starmer’s replacement, potentially as soon as mid-July. If this happens, there are several top REITs I think could receive a profits boost. Primary Health Properties (LSE:PHP) is one in particular I believe may benefit.
How so?
First things first…
But let’s take a step back for a moment. Let me explain why I already hold this FTSE 250 trust in own portfolio.
Primary Health Properties owns and operates hundreds of doctor surgeries, community medical centres, and other healthcare-related assets. These provide a steady stream of income the trust has translated into a large and dependable flow of dividends.
Shareholder payouts have risen every year since 1997. Analysts expect a 30th consecutive yearly hike in 2026, meaning a huge 8% yield.
As a keen dividend investor myself, I was drawn to Primary Health by its ultra-defensive operations. But it’s not just that healthcare focus that’s made it a dividend star down the years. Under REIT rules, it must pay at least 90% of annual rental profits out in dividends. That’s in exchange for juicy tax breaks.
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The Burnham factor
So how could a Burnham premiership boost Primary Health? There are several ways the company could benefit. First might come in the form of higher public services spending, and with it better investment in local healthcare facilities.
Critically, Burnham advocates greater emphasis on funding sickness prevention over hospital care. This approach could see resources shifted towards properties like community GP surgeries and diagnostic centres, the kind that Primary Health specialises in.
Finally, Burnham’s commitment to deeper regional devolution might see local authorities take charge of healthcare budgets for their areas. The result? Councils may sign long-term leases with REITs like this to lower social care costs, further boosting Primary Health’s revenue and cash flow visibility. Catching illnesses quickly and keeping people healthy is crucial in helping local authorities minimise the financial burden of long-term residential care.
A long-term dividend opportunity?
It’s expected that Andy Burnham will hike taxes to fund future healthcare investment. But given the massive weight of public debt in the UK, greater NHS investment isn’t guaranteed by any means. If the economy continues to struggle funding may well be cut, hitting Primary Health.
But on balance, I think the long-term outlook for this FTSE 250 REIT is robust. Government policy is already favourable towards community-based healthcare centres to reduce hospital patient lists. I can only see this improving if Burnham becomes Britain’s next Prime Minister.
Should you invest £5,000 in Primary Health Properties Plc right now?
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Royston Wild owns shares in Primary Health Properties.
