Primary Health Properties is raising £38.6m from an issue of new shares to fund expansion.

The healthcare property investor, which was one of the nine listed companies to convert into a REIT on 1 January, is carrying out a placing and open offer of 9.3m shares at 430p each, which is underwritten by Numis Securities.

The share issue coincided with the company’s half-year results to 31 December 2006, which showed a 7% increase in net asset value to 421p a share. Pretax profits were down 4% to £9m.

The purchase in December of Cathedral Healthcare added nine properties valued at £30.9m, which increased the size of Primary Health’s portfolio to £260m.

‘'The first half of our financial year has started strongly with all of our key performance indicators rising,’ said managing director Harry Hyman.