“The average government length is maybe 5 years, or that’s what it should be in theory and 5 years is not enough time to make a significant change like some of the ones we’ve talking about. So I think it’s a continuous programme of evolution and I know this, the NHS is a wonderful organisation. I got asked the other day if I thought it was broken. I don’t think it’s broken, I think that’s, that’s the wrong analogy. It’s under a lot of pressure and needs to adapt in Darwinian way to survive.”
Susan Freeman
Hi, I’m Susan Freeman. Welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment. Today, I am delighted to welcome industry veteran, Harry Hyman. Harry is the Founder of Primary Health Properties Plc. In 2024 he stood down as CEO to become the non-exec chair. He founded the company in 1995 based on the idea of purchasing Primary Healthcare premises and leasing them back to NHS General Practitioners through property investment. The company listed on AIM in 1996 and on the main market in 1998. In 2007 PHP was one of the first seven entities to enter the new UK REIT regime. Following the merger with Medics in 2019, PHP became the largest private owner of Primary Health property in the UK and Ireland. Last year PHP purchased its competitor, Assura, in a competitive bid beating rivals USPE Fund KKR. PHP now has a portfolio of over 6 billion pounds and a market cap of 2.5 billion pounds. In 2012 Harry founded the International Opera Awards and the Opera Awards Foundation to raise the profile of opera as an art form to recognise and reward success and to generate funds to provide bursaries for aspiring international talent in opera. Harry has a double first Geography degree from Christ College Cambridge and is a qualified accountant.
So now I’m really looking forward to hearing from Harry Hyman about his entrepreneurial journey to creating a 6 billion pound listed medical property portfolio. Harry good afternoon, thank you for joining us. We have known each other for quite a few years and, um, I’ve been looking forward to doing this podcast. I think the timing is great with the, um, Assura takeover last year.
Harry Hyman
Yeah, thank you for having me Susan, it’s been a very busy year ’25 and we have a lot of work to do in ’26 but we’re looking forward to getting our teeth into it so to speak and, um, in many ways it’s been culmination and a deal that’s been talked about for a long time but, um, the devils in the detail and it was a good opportunity to derive the benefits of scale for both sets of shareholders. So it was really good that we managed to get it over the line last year.
Susan Freeman
Yeah and, um, pretty exciting I think it was so we will certainly drill down into some of the detail. I think PHP now has a 6 billion pound property portfolio? So pretty impressive and when you started the company just over 30 years ago, did you imagine that it would grow to this size?
Harry Hyman
No, uh, it’s fulfilled every dream I could ever have really and, um, going back to whenever bought the first portfolio, amazingly enough at the end of, uh, ’95 the first four properties cost 1.4 million in total and then when we listed on the AIM market which was in March ’96, we raised what I thought was a large amount of money of 16 million pounds, 16 million with a 4 million loan stock from the Royal Bank of Scotland. So the company has been on a big journey. Obviously I’ve had wonderful help from my colleagues at both Nexus and Primary Health Properties and we’ve certainly taken advantage of the opportunity to consolidate and really indulge in the modernisation of the Primary Care estate across the UK and now in Ireland which is so essential to the delivery of a proper modernised Health Service in, in the 21st century.
Susan Freeman
So before we get to discussing the detail, I thought we should sort of put things into context a little bit and talk about where this all started. Where you started and whether there were any early indications of an entrepreneurial career?
Harry Hyman
Well yeah, when I was at school I was engaged in, I did some stamp dealing and some of my friends remember me selling them first day covers or from France and all that sort of stuff. And at university I ran the bar in my college, uh, and I’ve done, I’ve always had an eye to entrepreneurism but I’d like to give a, a call out, shout out to my first boss after I left Price Waterhouse. It was such a long time ago, it wasn’t even Price Waterhouse Coopers, it was Price Waterhouse, Michael Goddard who ran a really entrepreneurial buccaneering finance business where I worked from 1983 to 1994, uh, and we did all sorts of, uh, rinky-dink finance and it was a fantastic place to learn. He was quite a tough taskmaster but that taught me to be resilient, uh, and I learnt all about plant and equipment leasing, enterprise and development, Met C in property finance, fund management, asset management and indeed the private finance initiative. It was the sort of launch of the PFI that, uh, focussed my attention on leaving Baltic because after 11 years there I felt I’d earned my spurs and so I went off in my, on my own at the beginning of, uh, ’94 to start Nexus and one of the first projects I had was the idea to set up a property company to own Doctor’s surgeries because I discovered that GPs have their rent reimbursed to them by the National Health Service and obviously the National Health Service is an agency of the British government so in reality although the tenants might be four, six, ten GPs individually, the actual payer of the rent was the British government, you know, through the National Health Service and I thought this was a great yield and covenant mismatch. And I was, my sort of financial training with Michael kind of lead me to think that that was a mispriced yield and covenant risk and therefore something one could build up an interesting portfolio in but I never really felt it would get anywhere near to the two and a half billion that we were at before we merged with Assura, now the 6 billion that the merged company has. So it’s been a great, long but great journey.
Susan Freeman
So when you founded PHP in the, um, the mid 1990s, I think medical property wasn’t considered a, really a sexy asset class so you obviously saw, you saw something, uh, there. So did others not see it or did they see it and just not find it particularly interesting?
Harry Hyman
Well I, I think it has its, its downsides which is that the average lot size back in the mid ‘90s was maybe 2 to 3 million pounds a throw and to build up a portfolio of size would require an awful lot of deals and indeed, you know, people, I think offices and retail and warehouses and logistics are all well-defined asset classes where the lot size is much, much bigger so really it was kind of an illogical step to focus on something so small and granular but it appealed to me because I’d also just experienced a rather big health scare. Uh, I was diagnosed with non-hodgkin’s lymphoma, uh, at the end of ’95 and coming out of that, and here I am 30 years later so I am in full remission, I kind of felt that I should be giving something back and that investing time and energy in modernising all the Primary Care estate for the NHS was a wonderful thing to do. So improving peoples’ wellness and increasingly going down the prevention not cure agenda which is so vital to how the NHS can possibly cope in the future, struck a chord with me.
Susan Freeman
That’s really interesting because I wondered if there was a connection between the cancer diagnosis and the focus on, on medical. So various things came together at the same time?
Harry Hyman
Yeah, I mean to be fair I’d already started on the medical journey, uh, but there was a certain sense of irony or poignancy attending chemotherapy appointments at the Marsden whilst trying to buy medical centres but, um, you know, I think that’s been an important defining thing in my life and I want to give something back. I mean I’m in business to make money for my shareholders and other stakeholders, be under no illusion about that but you can also make money and do some good in the community.
Susan Freeman
It’s interesting because that has become a more sort of fashionable way of viewing, uh, real estate that, that actually has community benefit, it has social impact. Before we go further, just for listeners who may not know Primary Health Properties, I think it would be useful if you just gave some context, explain exactly what the portfolio is made, made up of and how you operate the portfolio?
Harry Hyman
Sure. Well Primary Care has changed dramatically in the 30 years we’ve been operating. If I go back to my first recollection of visiting a GP, which was in Stanmore, the GP lived in a very big house and you went into what was basically his front room, uh, Dr Byworth and, uh, I think his, his, uh, secretary or receptionist was his, his lady wife and that’s how it was. It was a single handed GP operating from a residential setting. And now given the extreme demands on, on Primary Care and modern practice and the fact that Primary Care, which means your first port of call in your healthcare journey is about more than just the GP, it’s about mental health, physiotherapy, all sorts of other things that are delivered in the Primary Care arena so the old model under which the GP borrowed the money to provide his house and the surgery and got paid rent by the government for doing that, is kind of out of date and even getting ten GPs or twelve GPs or twenty GPs together to agree on what their approach to property is going to be is quite a tall order. So the whole make up of Primary Care has changed but nonetheless there’s still a massive job to do because in a recent survey between 40 and 50% of all the GP premises in the country are still not fit for purpose because they operate out of very small, cramped, dilapidated and older property. So our classic medical centres that we want to buy now are 20,000 square feet, would come in at between 10 and 20 million and would have a great number of doctors. One of our pilot examples at, uh, Eastbourne has twenty four GPs but it has a hundred healthcare professionals. And you can have an x-ray, you can have physiotherapy, you can have any one of a number of things, uh, that poor old Dr Byworth’s surgery in Stanmore couldn’t possibly have delivered.
Susan Freeman
And do you develop these centres yourself or, or do you acquire them? How does it generally work?
Harry Hyman
Well for our first 25 years or so we just acquired them and forward funded them for developers but we got to the stage where we felt we should be developing our own and so we now develop from scratch and that’s obviously quite a complex and lengthy process but it’s riskier but you also get a better return.
Susan Freeman
And do you do that through PHP?
Harry Hyman
Yeah, everything goes through Primary Health Properties.
Susan Freeman
When you started to get the business of the ground, were there sort of any moments where you thought, actually this isn’t going to work?
Harry Hyman
Oh yeah lots, lots. I think that the global financial crisis in 2007/8 was a pretty hairy place to be. Not because there was anything wrong with the business but because all the banks we borrowed the money from were basically bankrupt and in the great scheme of things I’d never kind of though that Royal Bank of Scotland, Allied Irish Bank, Santander, the three banks we banked with were going to have such a tough time of it and there were moments when the future of the company was very much imbalanced. Not because of anything wrong with us, but simply it was very hard to get them to enter into new loan commitments rather than just call for their money back. But sense prevailed and we got through it. But not without some quite sleepless nights.
Susan Freeman
Yeah and I imagine, uh, there were a lot of other property companies that were in the same, same position?
Harry Hyman
Yeah but the great thing about Primary Health is that our rental stream which is now approaching 350 million, believe it or not, is undoubted and sort of our target is to have between 80 and 90% of the total income of the company coming directly from the British or Irish governments. The balance is largely pharmacy and now private hospitals so pretty secure sectors. And I think another dodgy moment for us was going into the pandemic when there was a fear that the adoption of virtual consultations would mean the end of face-to-face consultations across the NHS but in reality that’s turned out to be definitely not the case and now even though there are a vast number of virtual consultations, there are more face-to-face consultations in Primary Care than there were before the pandemic occurred. Which is quite extraordinary.
Susan Freeman
How do you explain that because logically you’d think if there were more sort of online consultations, there would be less face-to-face?
Harry Hyman
Indeed but I think doctors like to see the patient holistically and having a Teams call or a Zoom call is (a) not particularly confidential depending on where the patient is or where the doctor is, (b) does not give the doctor the full picture and a lot of doctors prefer to see a patient and many people have quite complex healthcare needs. You know, if you’re a fit 25 year old and you’ve got a cold or something and you need some medication, fine. But if you’re an 85 year old grandmother with five or six prevailing health conditions, it requires quite a detailed assessment by the GP which is probably done best, is best done face-to-face and we can lose sight of the fact that many people in the country don’t have broadband or, um, an iPhone or a Samsung and quite a lot of people don’t, don’t know how to operate that sort of stuff correctly and, if that wasn’t enough, the healthcare needs of the, of the population are very, very complicated. Let’s take mental health for example. A lot community mental health is delivered through Primary Care settings and that requires a nice room, a quiet room, somewhere to have a chat and if you’re living on the 24th floor of a tower block and you’ve got three young children, that’s not an ideal place to have a consultation about your mental health for example.
Susan Freeman
Yeah that’s true. And if somebody tried to replicate, somebody listening to you saying, you know, what a great sector it is to be in. If somebody tried to replicate PHP from scratch today. Could they do it? Could you still do it?
Harry Hyman
Yeah it’s a very big marketplace, uh, the combined Assura and PHP we have what’s called 18% of the footprint of medical centres and yeah it’s a big, it’s a big marketplace.
Susan Freeman
So what proportion of, um, UK healthcare proxy market do you now own with the combined portfolio?
Harry Hyman
Well, the way we like to think of it is we probably have 20 to 30% of the modernised stock. But I think my point is there is a lot of stock that needs to be modernised and so there’s a clear development opportunity. There are some hurdles that remain to be crossed because the rents that we’re getting from the NHS which are adjudicated if you like, by the District Valuer’s Office are not enough currently in order to justify new development. So at the moment we’re spending more of our time developing and acquiring property in Ireland where yields are attractive but also the funding cost is much lower and we have this intractable problem of how we get the NHS and the government to see sense and to increase the rents that they are prepared to pay for the medical centres. So to answer your first question, yep there’s a lot of space in the market. I would say that you need a lot of patience, p a t i e n c e, as well as a lot patients, t s, in order in order to get on in the health service but, although I’m not the most patient person I have to say. I have shown patience and the team, we’ve stuck rigidly to our business model over the 30 years.
Susan Freeman
So this sounds worrying Harry that if all this, um, NHS property requires modernisation and, um, the NHS isn’t or isn’t able to, um, you know, to pay the rental that’s needed. Who, who is going to do it and how, how do we get them to change their minds?
Harry Hyman
Well we, we have an active system of lobbying but I think you can easily lose sight of the fact that the NHS has a lot of competing priorities. If you are Wes Streeting, you are under enormous pressure to reduce waiting lists for hospital. Uh, you have enormous pressure to make sure the population is properly vaccinated to avoid pressures on the hospital system through flu and things like that. Uh, and also Primary Care properties are very important, there is a lot of surplus property in the NHS which needs to be repurposed. So we were hoping that the 10 year plan, uh, which talks about local neighbourhood centres which are really very big medical centres, would act as a stimulus to this, uh, system that we’ve got and we’re kind of working on it and trying to get people to see that it’s a bit of a false economy to scrimp on the rent when the service benefits from stopping people going to hospital or treating them outside a hospital are far, far greater than the rent of the property. You know, we once calculated that an ambulatory care centre which is sort of an anti-name for a walk-in centre but if you can walk there, you can be treated there. Only had to see seven patients a day saving them having to go to hospital for it to pay dividends for the NHS. But because data is quite difficult to verify because until recently Primary Care’s operated separately from Secondary Care, that integrated approach to care has not been very prevalent. But the creation of the integrated Care Boards, and they’re slimming down into smaller, a smaller number of bigger units, it then gives us hope that eventually we will get them over the line.
Susan Freeman
So what happened to the hospitals that Boris was going to build?
Harry Hyman
Well there you are. That’s a very good question. But to answer it more seriously, apparently a new hospital can cost 1 to 1.4 billion pounds. It would take 10 years, someone quite senior in the NHS told me to get a new one off the ground and many of the 14 or 40 that he promised were extensions or you know, minor projects to do with hospitals. So I think there’s a lot of capacity for politicians of whatever colour or political party to play with statistics. Someone at school told me once that, uh, a maths teacher told me that the statistician uses statistics like a drunk uses a lamppost, for support rather than illumination and it’s a great phrase.
Susan Freeman
That is, that is a great quote. So, uh, clearly a lot needs doing. So let’s talk about the Assura takeover last year. It was very high profile and seems to have been pretty fraught at times and was very, very public. Why was it important to do that deal?
Harry Hyman
Scale, uh, I mean so much of life is about scale. Although we weren’t allowed to refer to it in the public documents, the cost of finance saving if we were able to, you know, we now have about 3 billion pounds worth of debt, something shy of that and if we were to knock five basis points or ten basis points off our cost of finance over time, or more. You could see that would be a very significant drop down to the bottom line and it would have major benefits for the NHS because by definition we’d be able to offer them a better deal and that comes from being a larger company. And so that’s one very important reason. And I think, you know, we’ve gradually consolidated the market, we took over Prime in 2013. We merged, or took over Medics which is an 800 million pound deal in 2019. And the opportunity was too good for us to miss and therefore we, we’re not happy that KKR were going to buy Assura at a relatively cheap price for cash at arguably the bottom of the property cycle. So we decided to intervene and persuaded the board of Assura, eventually, that it would be a good idea for them to recommend our offer which was largely in shares and a small amount of cash.
Susan Freeman
And, since it, I mean it obviously makes so much sense to put the two companies together. Had you tried to get together before KKR?
Harry Hyman
Yeah, several times but I’ve got a little analogy which is that if you go to a disco – shows how old I am – if you go to a disco or party or something like that and you see a very attractive prospect on the other side of the room, you have to get their permission before you can have a dance. And if the partner doesn’t want to have a dance, what are you going to do? You are going to get frustrated. So fortunately for us, Assura had decided that they wanted to sell themselves to KKR and therefore that kind of opened the door for us to make perhaps an, an unwanted advance to the board of Assura. But their shareholders in kind of quite a rare display of outspokenness, really said that they wanted this deal to happen and we had the Head of Equities at Schroeder’s, the Head of the Property Department at Aberdeen, Gravis Capital, all sorts of people, uh, Marcus Fairage at Thames River, all coming out saying, no we don’t want KKR’s cash, we’d rather see PHP merge with Assura. And so eventually reason prevailed and I think also we were able to make the argument that we didn’t a US private equity house to own critical UK social infrastructure because we felt that we would be better guardians of those assets for the public and for our other stakeholders, like the NHS and the patients.
Susan Freeman
There was, um, a wonderful line in The Times in August last year – Pit a Rottweiler against a Chihuahua in a fight and there’s typically only one winner. So the big puzzler how the 130 billion dollar KKR managed to get sunk by the 1.25 billion pound PHP.
Harry Hyman
Well I don’t know if you’ve ever read of, um, Malcolm Gladwell’s books? But he, he’s written one where he talks about the struggle between David and Goliath. Goliath had scale, he wasn’t very nimble and he wasn’t as streetwise as David who managed to knock it out with his sling. So I, I just think we, we fought a smart, informed campaign. They wanted to get a bargain. We didn’t necessarily want a bargain, we wanted to pay a fair price and we felt that we would leave more of the upside on the table because most of the consideration was in the shape of our shares. So it didn’t really matter how much our bid was worth because if our shares went up after the deal, which they have, then all of the shareholders, both sets of shareholders would benefit. So I think that’s the key to it. We had quoted paper and we had brilliant PR advisors, we had a brilliant investments advisor and brilliant support from our stockbrokers and we just wanted it very badly. And this was an opportunity that I’ve been trying to do for maybe 15 years, right. Um, we were just very determined that we wanted to get it and the group, CEO, Mark Davis, myself, Alan Rothchild, DB Numus, Peter Hunt, well it was a very fraught, very exhausting, very tense, very nervous campaign but we got there.
Susan Freeman
Yeah, I mean, it must have been difficult, it must have been sort of quite hostile at some, at some stages. I mean, how do you keep your nerve when you’re under pressure, you know, because it was so, so high profile wasn’t it?
Harry Hyman
Yeah but it’s kind of a great thing to be involved in and, uh, a sort of wonderful thing. I think probably the depth, the worst moment was when I stepped out of my shower, so please don’t imagine that, listeners. At 5 minutes to 7 one morning, Monday morning I think it was, when our offer was outed by the other side with, with five minutes notice that they were going to reject our offer at 7.00am. And that was a terrible moment and as my CEO says, we went three nil down, imagine it was a football match, uh, and, uh, we gradually clawed our way back in. But I don’t know, we were single minded, we worked as a team, our CFO, Richard Howell did wondrously well with the numbers, as I said, Rothchilds were a brilliant advisor and Mark lead the campaign and we got it over the line and we’re working, you know, we really worked hard at it and when we finally got there, on August 12th, when we contractually got control of Assura. Of course then we weren’t actually allowed to take control of the business because had to still navigate the competition arena which we finally did on the October 29th. So it was a very long, stressful, drawn out process but we got there so what’s to say, it was a great team effort.
Susan Freeman
No it’s fantastic and, um, and a great, great result and there’s been a, I don’t know, I seem to be involved in lots of conversations recently about, you know, the need to scale up our, our REITs and obviously Andrew Jones has been doing that.
Harry Hyman
Brilliantly, brilliantly.
Susan Freeman
Yeah. So it’s now obviously six months on. How is the integration of the portfolio’s going?
Harry Hyman
It’s going fine. I mean, we said in our, in our merger document, combination document, that we wanted to make 10 million pounds worth or 9 million pounds worth of synergies on an annual basis. And we recently announced to the Stock Exchange that we are substantially through that. Most of it is in senior management but we also said we were determined to keep the best of both. So not surprisingly, Assura have some extremely good people who will be very good in the enlarged team and equally there are some duplicated functions that inevitably have to be eliminated. So that’s step 1. Step 2 is we, we persuaded people that we could go to a temporarily quite high level of leverage, over 50%, maybe even 55% and one of our number one jobs for this year is to reduce it back under 50% as quickly as possible and I suspect, I don’t know, that we’ll be using our existing joint venture with USS, uh, which Assura had in place and which continues in place, we’ll be using the opportunity maybe to spin out the private hospitals into a joint venture depending on the terms and if we’re successful in doing that. And also making some sales, uh, because, you know, capital rotation is important when you’re running a portfolio of over 1,200 properties and 6 billion pounds.
Susan Freeman
And what about, um, plans for expansion? I mean, do you, do you reach a point where you have acquired so many of the healthcare properties that there isn’t enough for you to expand in the UK?
Harry Hyman
No. As I said, our footprint is about 18%, maybe slightly more with the new developed centres. So we’re very keen to do more. We’ve also successfully expanded into Ireland and we’re very keen to do more there. And over time historically we’ve looked at other Northern European markets and it may be that we find a suitable portfolio in one of those to expand into. Conscious of the need to produce high quality State backed income at all, at all times. So, you know, the great thing, like I just sort of circled back on this, is that there’s this massive left shift of care out of hospitals. I’m not quite sure why it’s called a left shift but it is called a left shift out of hospitals into Primary Care and that’s a global phenomenon. It’s driven by cost pressure, it’s driven by technology, it’s driven by a desire for people to be treated more locally rather than clogging up expensive congested (disease ridden) hospitals where you’re likely to come out with more than you went in with and so if you’ve got something minorly wrong with you, you’re much better being treated in a properly equipped, uh, ambulatory care centre or Primary Care Centre and those are precisely the sort of assets that we want to own moving forward.
Susan Freeman
It’s interesting and, and in other European jurisdictions, do you have the same situation where the government backs, the government pays the rent?
Harry Hyman
Uh no, no you don’t have the same situation but a lot of European systems are, they have Health Mutuals where people pay insurance and then they’re treated by the Mutual. So, you know, there are analogist situations and I think in Ireland for example, a small proportion of the Irish healthcare centres are occupied by the actual GPs, most of the space is occupied by the State and that, that gives us quite a high percentage of the Irish incumbents paid for by the Irish government. And in Holland, they have what are called Gazunthaus Centrums which are sort of health centres in a loose English translation. Where again they might have a mutual health company being the tenant and groups of doctors being the sub-tenants. So, you know, all things are possible. So we’ve got an open eye but I think it will be not a miracle but it would be very surprising if we got as far as doing any of that in 2026 because our key task for ’26 are to deliver on the synergies, deliver on the deal leveraging and integrate the teams as you asked about.
Susan Freeman
Mm. Interesting. And these, um, European set-ups, do people actually pay, do they contribute towards the cost for their health care?
Harry Hyman
Well interestingly in Ireland, which as a massive generalisation, you could say it’s a slightly more left wing country than Britain. If you’re not a child, not expecting a baby, not got a chronic disease and not retired, you pay something like 50 to 60 euros to see the GP. Interesting. And, and I think you do the same in Germany but you recover the money from your insurer. So, you know, if you, I think, my own personal view, this is not PHP’s view. Is that co-pay has an enormous role to play in the future because I consider it wrong that I can see my GP, and I do see the GP, free. Whereas I think it wouldn’t be unreasonable to expect me to pay £25, £30, £50 but of course that’s a political hot potato of the first order and governments aren’t particularly brave when it comes to dealing with the healthcare system and the NHS but it’s, I think the way that the NHS will have to adapt is to be focused much more on the prevention agenda rather than the curing agenda and, um, this is a subject that’s quite close to my, my heart in the sense that we have more than a million type 2 diabetics in the country. All of which, you know, that’s classed as a chronic disease right? It would be much better to have saved those people from becoming type 2 diabetic in the first case and if I told you that 95% of all type 2 diabetes is reversible and treatable via diet, you could see that this is the task for us for future generations. And we do seem to me, to have a, and I’m not the best person to talk about this. An epidemic of obesity, an epidemic of junk food addiction which is not great. Uh, and will lead to a lot of problems in the future. So if you could prevent people from getting ill in the first place, I think that’s an important component of the healthcare agenda moving forward. Or the wellness agenda moving forward.
Susan Freeman
It’s a very, it’s a very good point and I suppose it’s such a, a big problem and governments are relatively short-term, you know, you get small things like preventing advertising of, of food that might be bad for you so, but does government talk to you about, you know, you’re providing the places where people are going to be able to get this healthcare. Do the government talk to you about what you can do?
Harry Hyman
Well we, we have an active policy of engaging with, with the government and with local MPs but it’s an uphill task because as we’ve seen from the last few weeks, there’s quite a busy news agenda and their attention quite often is focussed elsewhere. I so I think there’s a saying in life which I think is quite interesting and important that the urgent quite often crowds out the importance. So, you know, a lot of people put off making important decisions because they’ve got to take the dog for a walk or they’ve got to do something that’s very urgent. Well, sometimes you need to put the time aside to do the important and, uh, there have been lots of attempts at this but as you rightly say, the average government length is maybe 5 years or that’s what it should be in theory. And 5 years is not enough time to make a significant change like some of the ones we’ve been talking about. So I think it’s a continuous programme of evolution and I, I know this, that the NHS is a wonderful organisation. I got asked the other day if I thought it was broken. I don’t think it’s broken, I think that’s, that’s the wrong analogy. It’s under a lot pressure and needs to adapt in a Darwinian way to survive.
Susan Freeman
But is it, I mean is it difficult for PHP to make the decisions when the future political, economic and healthcare related is sort of pretty uncertain?
Harry Hyman
Well it’s uncertain with regard to the detail but one thing is certain that people will continuously have to go to get attention and although AI has a role to play in speeding up the diagnostics, improving the accuracy of diagnostics, all sorts of things, which affect things. People still want to go and see their GP because that holistic view of the person, the chat with the doctor is like really important. I, I mean I may live to be proved wrong, but I doubt that anyone is going to be given a diagnosis that they’ve got cancer by Zoom or Teams. And if so, is it a society we want to live in. So I think we are human beings and health is a whole thing, you know. You might have bad joints because you’re overweight. You might have diabetes because you eat too much sugar and too many junk food meals. But that might be a function of your economic situation. We get a rather blinkered view of life living in the West End or London. When we go to some of our medical centres in places like Blackpool or Burnley or Middlesbrough or Oldham, you’d be shocked, uh, Susan at the condition of the people that you see going into the centres and economic deprivation leads to bad healthcare. If I told you that the man, the average man in Blackpool would expect to live 28 years less than the average man in Knightsbridge. You would be shocked. But when, when I said that to the Blackpool MP before the last election, so he’s no longer the Blackpool MP, he said, that’s nothing Harry, I have constituents that won’t live till they’re 40. And I said, well what do you mean? And he said, well drug and alcohol abuse, lack of a job, means that they’re in a dire straits and that’s a terrible thing. And I think that’s why the NHS is very important to act as a safety net and access to free care at the point of delivery for those who need it, is like critical. Very important.
Susan Freeman
Yes and we keep hearing these figures about, you know, the number of people that are not working who should be working because, you know, they have got some medical condition and, uh, I don’t know how one, you know, helps those people get back into work. There’s also the problem with AI that a lot of jobs, I mean entry level jobs are going to go. So all these problems are going to become worse aren’t they?
Harry Hyman
Well I’m a great, actually at heart I’m an optimist and I think that people might have felt the same, those people who were luddites, who smashed up machinery because they thought that it was going to be the end of the world, the agricultural revolution. New jobs appear and I was talking to someone today who made a very good point, that we’re still going to need plumbers, electricians, hairdressers, waiters, all sorts of things because people will have more leisure time. You are right, we do need to focus on re-training but that is where education comes in and people will need to be re-educated vocationally probably three or four times in their life rather than just once as tends to be the case now. But that’s a whole nother topic I suspect.
Susan Freeman
Yes. So let’s, it’s a good point I think to turn to, um, the, um, International Opera Awards. I don’t know how you find time to do all this but you launched the Opera Awards I think in 2012 and I still remember sitting on a table at one of your first dinners with the amazing Opera singer, Joyce DiDonata.
Harry Hyman
You were lucky.
Susan Freeman
I was very lucky. How did that come about?
Harry Hyman
Well opera is one of my passions in life. I think it’s a brilliant art form. Also with another hat on, I have an events media business and we run the Health Industrial Awards, the Education Investor Awards and they’re very successful because people like to win awards. And I think I was at the opera one evening and it might have been quite a boring opera because sometimes there are boring operas or boring parts of operas and I, you know how your mind sort of wanders and I thought, well why is there no International Opera Awards. So after doing a bit of research and asking people in the sector if they thought it was a good idea, I decided foolishly to Stockholm and off we went. And one of the biggest things that I wanted to get out from the awards was a set of bursaries to give to aspiring talent in opera from around the world because you may think it’s tough with the commercial world but my goodness me, it’s hard for people in the creative arts.
Susan Freeman
So how did you go about sort of launching this. I mean, do you run it now or do other people run it for you?
Harry Hyman
Well my secretary, Ylanda and I we run it. We coordinate it. I get a lot of help from Opera Magazine which is my media partner. Um, the web has enabled us to reach out to the whole world. People put their votes in or nominations in on a website and we then, this year we’ll be using AI to aggregate the results. We produce a long list which goes to a jury of 24 people. We have something like 25 awards each year and the jury select the shortlist and then the shortlist if voted upon secretly by the jury and then we announce the results at the awards which this year will be in Vienna on November 21st. And we use the skills of my events team to help us put that on.
Susan Freeman
Well it sounds pretty amazing and, um, when you sort of look back at the 30, 30+ years of this, um PHP journey. What do you reckon has contributed sort of most to your success? I mean is it, is it intelligence, timing, resilience, or is it luck? Is it, or is it a combination of, of many things?
Harry Hyman
You certainly need luck in your life because if you’re in the wrong place at the wrong time that could be not such a great place to be in. I think sheer bloody mindedness and determination to be honest and I think an understanding of finance and the way the Stock Market operates has been very useful and as I said at the beginning, my former boss, Michael takes a large share of praise for that. My discipline learning from Price Waterhouse as a chartered accountant, which may sound very boring it’s quite an essential set of skills. My team have been good. The fact that we’ve always hedged out our debts so we’re not massively exposed to interest rate swings. Yeah, you asked me earlier about near death experiences. I think the afternoon that Liz Truss had her fateful budget ranks as pretty high up the list of, uh, ghastly moments when gilt rates were for a moment veering out of control. And our stock price was going the other way from gilt yields, down. But we got through that by staying calm and responding in a rational, sensible way. To calmness under pressure might be another defining feature.
Susan Freeman
Would you, would you say that you do remain calm under pressure?
Harry Hyman
Mainly.
Susan Freeman
Yes the Liz Truss, um, scenario I mean there’s nobody, nothing that anybody, you know, could do so, um…
Harry Hyman
Well I did have some people coming into my room then when Kwasi Kwarteng was speaking and the gilts were going crazy, uh, they said, what are we going to do, what are we going to do. And I said, well the first thing we’re going to do is nothing. We’re just going to wait and see. It’s all fine, we’re going to give it a couple of days to see what happens but the thing we’re not going to do, is we’re not going to panic. So don’t panic captain.
Susan Freeman
I think I was at the, um, Conservative Party Conference when this was going on and Kwasi Kwarteng was, um, due to speak at a breakfast and I thought, I’m not sure this is going to happen and he basically got up on the podium and he said, I’m sorry, um, you know, I’m very busy, have a good breakfast and went. So I don’t think the sponsors were thrilled. So is there anything with the wonderful advantage of hindsight that you would have done differently?
Harry Hyman
Oh yeah lots. Lots and lots and lots. I think I’d have stayed a private company for a bit longer, uh, I think we, we had a very tricky first four or five years as a small public company, a bit unloved. But maybe all businesses have that initial period and it seems remarkable that, you know, when you look at the developments of our portfolio, when we bought Medics from memory, we had a portfolio of 1.5 billion. It suddenly became 2.3 when we merged with Medics. We then grew it gradually to 2.8 and then we merged with Assura to make 6. And I suppose if we hadn’t started, we’d never be able to get along that journey but private equity was not really an available resource for property in the very early days and indeed today, it wants returns that are very difficult to provide out of long income assets. People seem to have lost sight of what I would call the risk adjusted return. People seem obsessed with nominal returns without necessarily I think understanding the risks inherent with a sort of high yielding cashflow.
Susan Freeman
So from what you say, I mean you talk about the accountancy, um, qualification although it might be boring it sounds as if it’s a pretty good foundation for setting and running a business?
Harry Hyman
Well I think that, the property side is obviously important, you don’t want to buy terrible properties but many property companies historically have come unstuck because they haven’t looked at the liability side of the balance sheet in enough detail. And so I think the liability side is equally as important as the asset side.
Susan Freeman
So just sort of looking forward say 5 years, where do you see PHP being in 5 years’ time?
Harry Hyman
Well I’d like to see us being more of a pan-European business. I’d like to see somehow the log jam in UK Primary Care or English Primary Care unlocked. Uh, and then we’ve got a massive task to modernise Primary Care across the UK because a lot of it is still delivered out of very old, small, cramped buildings.
Susan Freeman
Well we’ll talk again in, in 5 years’ time Harry.
Harry Hyman
I shall look forward to it Susan.
Susan Freeman
Yes okay. Well thank you very much, I really enjoyed that.
Harry Hyman
My pleasure, thank you for having me.
Susan Freeman
Thank you so much Harry. You make it sound so easy to build an enormous property empire which also provides such important community value. It clearly takes great financial nous and determination.
So that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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