Primary Health Properties PLC

Annual Report
for the Year Ended
31 December 2014

Environmental and Social Issues

ENVIRONMENTAL CONSIDERATIONS

Properties in the sector are specified to meet the NHS’s exacting standards with regard to environmental considerations. Environmental matters are an integral element of PHP’s assessment of the suitability of new medical centres that the Group looks to fund and acquire.

PHP undertakes an assessment of environmental risk as an important element of its due diligence process, obtaining an environmental desktop study and energy performance certificates (“EPC”). PHP has engaged an Environmental Consultant, Collier & Madge, to help in this process.

PHP engages with its development partners to promote the highest possible standards of environmental performance when designing and constructing new premises. As a minimum, new properties are required to achieve a BREEAM “Excellent” rating, but where possible the aim is to exceed this. Ongoing environmental responsibilities are included in the leases entered into by the occupational tenants as a norm for newly built premises. 100% of the newly completed assets delivered in 2014 held an EPC with a rating of B or better.

Where PHP acquires already completed assets, however, its ability to influence energy efficiency is limited. In these instances and for existing assets within its portfolio, PHP will assess the opportunities to improve the environmental efficiency of a property and work with its tenants to improve the environmental performance of an asset with enhancements such as the installation of solar panels.

PHP is committed to the principles of continuous improvement in managing environmental issues, including the proper management and monitoring of waste, the reduction of pollution and emissions, and compliance with environmental legislation and codes of practice. PHP works with its development partners, tenants and other stakeholders to develop ways in which to monitor and improve the management of such issues.

SOCIAL IMPACT

PHP’s aim is to modernise and improve the ability to provide efficient and effective healthcare in the UK through the provision of modern, purpose built properties, let to GPS, the NHS and other healthcare operators. The facilities are predominantly located within residential communities and enable the UK population to access better health services in their local area. This is central to the organisation’s strategic objectives and business planning processes.

PHP is committed to ensuring that the properties it develops and owns both meet NHS requirements and also provide flexibility for future change, update and expansion. When working with its partners to develop a new healthcare property, PHP’s appraisal of a project will include a review of matters such as:

  • Location: looking at the sustainable nature of a site and how it will serve the local population,
  • Importance to the local healthcare provision: ensuring that the centre is affordable and that the centre meets the needs of the local healthcare demand,
  • Flood risk: to ensure the risk is avoided or appropriate prevention measures are developed,
  • Design standards and environmental responsibility: a review of a project to ensure that it conforms from a design and environmental standpoint with applicable requirements.

Ongoing active management of the property portfolio seeks to maintain the centres as fit for purpose, minimise obsolescence and provide for repairs and maintenance to be undertaken efficiently, so as to minimise both cost and pollution.

PHP is a founder member of the Social Stock Exchange (“SSE”) which was formed on 6 June 2013. The SSE provides a platform for the promotion of businesses who have a focus on their social and environmental impact. There is a stringent admission policy where member companies set out their objectives, policies, monitoring procedures and reporting measures which are updated annually in the form of an Impact Report.

Social impact consideration and management sits at the heart of the management of the Group and is directly reviewed by the Board. Systems have been established to ensure that PHP is properly monitoring its social impact and identifying and managing opportunities and risks associated with the provision of its properties. Where possible, data is collected that evidences PHP’s impact against set measures, such as continuing to obtain energy certificates for properties within PHP’s portfolio. Ongoing activity also includes regular engagement with key stakeholders, for example, to assess their experience of working in or visiting a PHP centre so as to identify opportunities to enhance the facilities or address issues that may arise.