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Notional Rent Reviews

Q

70-80%* of GP surgeries across the UK are losing out on valuable income because their rent reimbursement is too low! Are you one of them?

A

GP Surveyors can carry out a free notional rent assessment to establish whether your practice is underfunded. GP Surveyors successfully negotiate notional rent increases for hundreds of GP surgeries each year, some of which can receive increases of up to 80% amounting to five figure sums (over and above the notional rent initially calculated by the District Valuer / NHS England)!

TIP Our experience shows that GP surgeries should seek a second opinion for every notional rent review – even if you received a large increase last time.

“I found everyone I had contact with very helpful from start to finish. It was brilliant that GP Surveyors handled this on our behalf with very little input required from me. The difference in our notional rent was a lot more than I would have envisaged, and very welcome in today’s climate.” Sheena Pappin Newquay Health Centre, Cornwall

Between 2012 and 2014, GP Surveyors achieved notional rent increases totalling £5.7 million. This amounted to an average increase of nearly £8,000 per client. Our clients have put this additional income towards valuable activities such as refurbishing patient waiting areas, installing new telephone systems and extensions. GP Surveyors carry out nationwide notional rent assessments for free. We only charge if we are successful in our negotiations. *This is an estimated figure based on GP Surveyors’ work with a fifth of GP practices across the UK.

Are you on a Cost Rent? If so, we can establish whether you would be better off moving onto a Notional Rent. We also do: Valuations, Leases, Pharmacy Rent Reviews, Pharmacy Implants and Sale and Leaseback


Valuations

Q A

Do you want to know how much your GP surgery is worth?

GP Surveyors can provide a valuation of your surgery whether you’re putting it up for sale, preparing for a GP to join or leave the practice, or wanting to raise capital to develop your premises. The valuation of a doctor’s surgery is a specialist skill. Our team of primary care Chartered Surveyors will use their vast experience of working nationally to draw upon a wealth of comparable evidence to ascertain the value of your GP surgery premises.

TIP Market valuations are only valid at the time they are carried out. Therefore, it is important to never rely on an old market valuation report.

“Fantastic company - very prompt, helpful and quick to deal with. Everything was explained with no hidden cost! Report received quickly.” Rachel Maddock The Writtle Surgery, Essex

We will then provide you with a written report which details the value that we have arrived at and why we believe this to be an accurate valuation. Valuations undertaken by GP Surveyors are insured and have to meet strict criteria governed by the Royal Institute of Chartered Surveyors (RICS). We can also carry out valuations with regards to using the premises for an alternative use.

We also do: Notional Rent, Leases, Pharmacy Rent Reviews, Pharmacy Implants and Sale and Leaseback


Leases

Q A

Do you have a lease that is coming up for renewal? Do you want to agree improved terms with your landlord or tenant? GP Surveyors can assess your lease and negotiate the optimum rent and lease terms for you. If you’re a GP practice leasing your building, we can help to increase the flexibility of your lease, reduce your rent and service charge payments, and we may even be able to negotiate benefits such as rent free periods or lump sum incentives.

TIP Always engage with a specialist surveyor before entering into a lease agreement to ensure that you’re getting the best deal from the outset.

“Extremely professional, a genuine and honest service, excellent communication throughout the whole process and a great end result.” Lesley Alexandrou Beech House Surgery, Clwyd

If you’re a GP practice who leases space to a tenant (e.g. a pharmacy, dentist or physiotherapist), we can help to increase the rent and service charges that you receive and reduce the risk associated with your lease. GP Surveyors are experienced in negotiating lease deals, detecting any potential issues associated with leases and identifying changes that can be made to ensure that our clients are getting the best deal. We will also work closely with your solicitor to ensure your returns are maximised and liabilities minimised.

We also do: Notional Rent, Valuations, Pharmacy Rent Reviews, Pharmacy Implants and Sale and Leaseback


Pharmacy Rent Reviews

Q A

Are you losing out on valuable income because the rent that your pharmacy tenant pays is too low? GP Surveyors can assess the rent for you free of charge, ensuring that you are receiving the best possible rent for the precious space that you are leasing out. Between 2012 and 2014, GP Surveyors achieved average pharmacy rent increases of 49% or £7,990 per year. This would amount to an increase in income of £199,750 over a 25 year pharmacy lease!

TIP We can also carry out rent reviews for other complimentary services who rent space from you.

“GP Surveyors are extremely professional, quick to respond to any queries, easy to talk to and explain things well. They successfully negotiated a considerable increase in our pharmacy rent recently.” Julie Hadlow St John’s Medical Centre, Grantham

This really goes to show the importance of ensuring that you are receiving the correct rent from your pharmacy tenant. GP Surveyors can carry out a free assessment and, if we believe you are losing out, we can then negotiate an increase with the pharmacy (or their agent) on your behalf, managing the process for you completely from start to finish. Our negotiations would be based on comparable evidence drawn from surgeries with pharmacy tenants similar to yours. It is important to note that the pharmacy’s surveyor will try to minimise the cost, liability and rent for the pharmacy. Therefore, it is extremely important that you are also professionally represented to obtain the best deal.

We also do: Notional Rent, Valuations, Leases, Pharmacy Implants and Sale and Leaseback


Pharmacy Implants

Q

Have you considered renting out space to a pharmacy or other complimentary service to boost your income and enhance patient experience?

A

GP Surveyors can help you to find the most profitable options available to you.

With the right deal, a pharmacy (or other complimentary service such as a dentist or chiropractor) is an excellent addition to a GP surgery.

TIP Pharmacies typically pay rent at a much higher rate than notional rent or other private services.

“The service was seam free and easy for us with great benefits for the practice. Thank you GP Surveyors, much appreciated!� Emma Couch Mote Medical Practice, Maidstone

Leasing out spare space or space excluded from NHS funding can significantly increase income and improve services to patients in the provision of a one-stop facility. It can also boost the capital value of your surgery. GP Surveyors can establish the feasibility of installing another service in your surgery, present the best options to you, approach the market to find a suitable tenant, ensure maximum bids are achieved from prospective tenants and produce a steadfast lease with terms favourable for you (alongside your solicitor). We can also sometimes negotiate one-off premiums and secure agreement from the pharmacy to fund any changes required to the premises.

We also do: Notional Rent, Valuations, Leases, Pharmacy Rent Reviews and Sale and Leaseback


Sale & Leaseback

Q

Would you like to release equity from your GP surgery, ease your recruitment problems and simplify issues associated with retirement?

A

There are many GP practices currently exploring sale and leaseback as the best solution. GPs are increasingly choosing sale and leaseback because:

TIP The process of getting the best price for your surgery is not like selling a house. GP surgeries are unique properties that need a proactive and specialist approach.

“It was a painless exercise, GP Surveyors dealt with everything. They kept me informed and they were always helpful and pleasant.” Lorraine Braithwaite Violet Lane Medical Practice, Croydon

• Recruiting new partners is much easier and removes the need for the incoming doctor to take on a sizeable loan. • Doctors can take career breaks or retire without the hassle of selling their share. • Leases are assigned to the current partners, meaning that departing doctors are no longer liable. • You no longer have to deal with all the risks associated with owning premises - leaving you with more time to care for your patients. • The capital that is released from the sale can be reinvested in other things such as expanding services or opening another surgery elsewhere. • GP practices can consider moving premises more easily when the lease comes to an end. GP Surveyors will market your surgery as a specialist property to quality primary care investors (who we already know are interested in investing in GP surgeries) in order to achieve the maximum price.

We also do: Notional Rent, Valuations, Leases, Pharmacy Rent Reviews and Pharmacy Implants


Case Study Coppull Medical Practice Chorley, Lancashire

“ This practice increased their income, enhanced patient experience and boosted the market value of their surgery by 20% when they installed a pharmacy into their premises.�


Case Study Coppull Medical Practice GP Surveyors worked with Coppull Medical Practice to install a pharmacy into the premises.

T

he practice had received a direct offer from a pharmacy and GP Surveyors were initially brought in to establish the viability of this offer. This involved establishing whether the pharmacy rent that would be paid to the GP surgery would be more than the notional rent that the surgery could receive for the floor space. “This is one of the main concerns for GP practices who are considering installing a pharmacy into their premises,” explains James Williams, the surveyor assigned to the case. “However, we calculated that the rent that Coppull Medical Centre should receive from a pharmacy would more than cover any loss in Notional Rent. “Our next step was to identify whether a better deal could be achieved from another pharmacy so the opportunity was put out to tender. We received competitive bids from a number of pharmacy companies with the most attractive proposal being from Medicx Pharmacy.” GP Surveyors negotiated the Heads of Terms for the lease with the pharmacy’s Development Director to ensure that the terms were as favourable as possible for the practice. As part of this, a premium was agreed and Medicx Pharmacy paid for a new entrance to be created. They also paid a little extra to help the surgery reorganise internally.

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“ The decision to install a pharmacy into the surgery was a great move by Coppull Medical Practice as it has increased the Market Value of the premises by about 20%!”

GP Surveyors then monitored the process, chased solicitors on behalf of the GP practice and made sure that any obstacles were overcome as quickly and easily as possible.

In addition to the benefits outlined above, the inclusion of a pharmacy at Coppull Medical Practice has boosted their income and increased the Market Value of the premises.

Caroline Bassett, Practice Manager at Coppull Medical Practice, said: “We had worked with GP Surveyors for some years in respect of notional rent reviews and they had always provided excellent service.

James commented: “The decision to install a pharmacy into the surgery was a great move by Coppull Medical Practice as it has increased the Market Value of the premises by about 20%! This is a fantastic uplift which would make a huge difference should the GP partners ever decide to sell.”

“After speaking with James I was reassured that GP Surveyors would handle most of the negotiations and implementation which was extremely reassuring as I was unsure how to implement this without professional assistance. They also assured us they would obtain the best terms and conditions possible. “GP Surveyors advised and supported me throughout the process and even afterwards. They were extremely easy to contact and always explained complex things in a simple way which was easy to understand.

Caroline concludes: “I can definitely recommend installing a pharmacy into your GP practice as it’s been very successful for us. I recommend using GP surveyors as it is a mine field and their experience was crucial. I also recommend Medicx Pharmacies as they have been excellent to work with from the very start.”

“The pharmacy is benefiting our practice by holding the prescriptions out of hours so patients can collect them in the evening and at weekends, providing a more convenient service for patients. They are also assisting with the delivery of the influenza programme. It is convenient for patients and staff who need a prescription quickly, and patients can see a doctor and obtain their prescriptions without having to visit another establishment. Medicx is a very modern pharmacy which has given the surgery a more modern feel.”

T 0114 281 5850 F 0114 258 6572

info@gpsurveyors.co.uk www.gpsurveyors.co.uk @GP_Surveyors


Case Study Beauchamp House Surgery Chelmsford, Essex

“ Beauchamp House Surgery received reimbursement increases, above the District Valuer’s initial valuation, of 28% and 22% for consecutive Notional Rent reviews...”


Case Study Beauchamp House Surgery Beauchamp House Surgery in Essex approached GP Surveyors for advice on their Notional Rent reimbursement for two consecutive rent reviews, after they received valuations from NHS England.

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ames Williams, the surveyor assigned to the case, inspected the surgery initially and agreed that the valuation should have been higher due to a number of reasons including:

1) Inaccurate floor areas: The District Valuer (DV) had used inaccurate floor areas that had been adopted in previous unchallenged valuations. 2) Low unit rate: GP Surveyors felt that a higher unit rate would more appropriately reflect the central location of the surgery and the large purpose built extension to the rear. 3) Low value placed on car parking spaces: GP Surveyors proposed that a greater value be attached to the surgery’s car parking spaces due to its central position.

Following successful negotiations with the DV, GP Surveyors agreed an increase of 28% above the District Valuer’s initial valuation. Three years later, a different DV was appointed to carry out the surgery’s next Notional Rent review. His opinion of the surgery’s value was much lower than expected. The surgery attempted to discuss the matter with the DV however he felt entirely justified and correct in his decision. GP Surveyors were instructed yet again and negotiated an increase of 22.7% above the District Valuer’s initial valuation. Dr Simon P. Schultz, Partner at Beauchamp House Surgery, said: “We were frustrated by a PCT that wished to reduce our Notional Rent and a DV who refused to negotiate with us. “Following GP Surveyors’ negotiations, we secured a Notional Rent increase of 22.7% above what was being proposed by the DV! The increase in funding is particularly important to us at a time when financial pressures on primary care are so great. With the extra funding received, not only have we prevented a substantial drop in practice income but now can also afford to refurbish, repair and decorate our building!

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T 0114 281 5850 F 0114 258 6572

“From our experience, all medical practices should seek a second opinion on their Notional Rent to ensure that they aren’t missing out. There is absolutely no cost to ask GP surveyors for advice, we have used them twice with excellent results on both occasions.” James Williams echoes this: “This case is a great example of why GPs should seek advice from a specialist Chartered Surveyor during every triennial Notional Rent review.”

“ Following GP Surveyors’ negotiations, we secured a Notional Rent increase of 22.7% above what was being proposed by the District Valuer! The increase in funding is particularly important to us at a time when financial pressures on primary care are so great.”

info@gpsurveyors.co.uk www.gpsurveyors.co.uk @GP_Surveyors



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