Northwest Healthcare Properties REIT has sold its U.K. portfolio to Assura PLC for £500 million (C$885 million.)

The divestment concludes a strategic review that began in 2023, Northwest announced Thursday.

The strategic review resulted in the sale of $1.6 billion of assets, said Northwest. The massive sell-off was designed to improve the debt-laden REIT’s balance sheet and increase unit value.

Assura is a publicly-listed REIT based in London. Of the £500 million, Assura paid £400 million (C$708 million) in cash. Northwest received the remainder in Assura shares valued at £100 million (C$177 million.)

The sale price represents a 5.9% cap rate. Northwest plans plans to use the net sale proceeds to repay $690 million in debt bearing a weighted average interest rate of 7.9%.

The REIT said the strategic review reduced outstanding debt, including convertible debentures, to $3 billion from $4.2 billion.

“The management team, in collaboration with the board, remains committed to maximizing value for unitholders by continuing to execute on identified initiatives,” said Dale Klein, who chairs Northwest’s board.

“This includes a commitment to further asset sales in order to continue to simplify the business and strengthen the balance sheet. These strategic actions will help us to continue deleveraging as we work towards our goal of becoming an institutional-quality REIT.”

Northwest’s property valuations fell by $571.8 million in 2023.

“Our focus on cure assets and social infrastructure, along with investments in care and life sciences, will continue to drive our future growth,” said CEO Craig Mitchell.