1. GP Premises Current Issues!
Paul Conlan MRICS, Operations Director
RICS Registered Valuer
T: I E: I

2. GP Partnerships
It is essential that every Practice has a robust Partnership Agreement (PA).
The PA should also stipulate how the property is to be valued and the process for succession / retirement (helps avoid costly disputes).
Why is succession becoming more important?

3. Succession Planning Issues
Retiring partners are retaining their share in the property
Incoming GP’s reluctant to buy in or become partners (salaried / locum work).
Recruitment crises
Age and gender profile of existing workforce
Working trends
What issue is created by first two points?

4. Uncommon Parties = Lease
When is a Lease required?
(Simple rule – when 100% of the owners are not 100% of the occupiers)
Who benefits from the Lease?
(provides clarity to all – secures income for Landlord and property for ongoing care for Tenant)
What issues might there be in creating a Lease?

5. Issues? Occupier may already have a legal right to occupy - why?
Occupier may be resistant to change – Why do I need a Lease?
Third wheel – NHS England
Why might NHS England be an issue?
Different desires and motives of parties?

6. Solutions?
GP Contractors require to provide premises as a function of their Contact.
Legal remedy (Court will impose a Lease)
Sale / Sale and Leaseback
Transfer of Contract
Mergers / Federations

7. Solutions – Create other Issues?
Legal remedy – better to explore amicably before igniting but S25 notice generally served to protect Landlords position (6 months notice). Court is costly
Sale / Sale and Leaseback – usually requires the creation of a Lease on terms acceptable to the Investment Market, Tenant, Landlord and NHS England

8. Solutions – Create other Issues?
Transfer of Contract – may be difficult to obtain full Investment Value (Assuming an acceptable Lease could be created)
Mergers / Federations – Undoubtedly going to be Property issues. Requires an estates strategy in place at outset or very near beginning – why?

9. Maximising Surgery Income (NHS Reimbursement)
Notional Rent
Ask a specialist to check your reimbursement This is the easiest way to generate extra income
Currently around 70% of the Notional Rents we check lead to an increase in reimbursement for the practice
Cost Rent to Notional Rent Switch
This can be done at anytime, you do not have to wait on NHS providing you a figure. However, once you elect to move you cannot go back and thus it is important that you seek suitable advice from the outset.

10. Maximising Surgery Income (NHS Reimbursement)
Actual Rent
Seek assistance to ensure that your NHS Rental Reimbursement is sufficient to cover your Actual Rent.
Due to the building being owned by a third party it is difficult to easily generate extra income from Leased premises
Checks are required around the conditions of your Lease as well as the impact of the new income stream upon your NHS Reimbursement

11. Maximising Surgery Income (Other Income)
Pharmacy
- Existing (rent review)
Ask a specialist to check your Lease and provide advice.
Dealing with Rent Reviews with Pharmacy Operators and their agents requires specialist knowledge and information.
- Implant (new opportunity)
This could be a valuable source of additional income.
It is not unusual for Practices to enter into deals with operators without specialist advice.
However, the deal rarely compares to what they could have obtained with suitable representation.

12. Sale and Leaseback Equity release & removes buy in
Importance of Lease Terms
Not a solution for everyone – individual circumstances need considering and can be timing issues (redemption penalties)
Seek advice from specialists

13. For additional information and advice contact GP Surveyors