Plenty of deals snuck in under the wire and were completed just before Christmas last year. One of them was the biggest UK real estate deal of the year, and it has gone almost entirely unnoticed by the market.

On 23 December, Medical Properties Trust, a specialist medical property investor based in Birmingham, Alabama, with $16B of assets, announced that it had bought 30 private UK hospitals from a group of hedge funds headed by Centrebridge Partners for £1.5B. That makes it the largest UK real estate deal of 2019, just edging out the £1.46B paid by Blackstone and Telereal Trillium for Network Rail’s Arches portfolio.

The hospitals are leased to BMI Healthcare for 30 years, with two five-year lease extension options. The price represents a yield of 8.9%.

The deal highlights the confidence of specialist U.S. property investors in the UK real estate market, alternative sectors in particular. But not only that, Medical Properties Trust said it was a vote of confidence in a UK healthcare system which during the recent general election faced existential questions about how it should operate in future.

“The UK market is highly attractive for future growth with its appealing demographics and unwavering governmental and social commitment to providing healthcare to its population,” the company said when outlining the benefits of the deal.

The deal also brings to a close one of the last major UK real estate distressed debt restructurings left over from the financial crisis.

The portfolio was bought in 2006 by a group of investors including private equity firm Apax and property investor London & Regional. A portfolio of 35 hospitals then valued at £2.1B had £1.6B of debt secured against it.

That debt was originally due to mature in 2013, but a fall in income for BMI and the general decline in property prices caused the value of the hospitals to drop, making them impossible to refinance. Hedge funds including KKR, DE Shaw and Centrebridge took over the property portfolio in 2015, having bought into the debt secured against the assets at a discount.

Now there is £1.5B of debt secured against 30 hospitals, meaning the MPT has bought the portfolio for the level of its debt, which will be repaid in its entirety following the deal.

CBRE advised the buyer.