Primary Care Surveyors, leading property specialists to the primary care property market, delivered an innovative property solution to partners of the Witterings Medical Centre, enabling the centre to thrive and continue to provide excellent services to the local community.
The primary care landscape is changing, with retiring partners taking capital from property equity for retirement, requiring new incoming doctors to provide that capital, by buying into the practice. However, new young doctors coming into the medical profession have a differing outlook to previous generations of GPs, which may impact on the GP surgery as we know it.
Today’s young doctors enter the profession with increased financial responsibilities, which may include the repayment of student loans, the responsibilities of a mortgage and young family, and the prospect of funding education for their children. Therefore, buying into a medical practice may not be a level of financial commitment they are prepared to shoulder at the start of their new careers.
The Witterings Medical Centre in East Wittering, near Chichester, provides highly important health care to the local community. The centre, built around a team of 8 doctors, offers a wide range of services including midwifery, pharmacy and physiotherapy, as well as an ‘in-house’ Health Visitor and District Nurse.
The partners instructed Primary Care Surveyors to assist with a property issue, which would enable the practice to attract new GPs as existing partners retired. The opportunity existed for the partners to dispose of the freehold interest and to enter into a lease for the entire building, which would release equity to provide capital for exiting partners and which would also eliminate the need for new partners to provide capital to buy into the partnership.
The property comprised of three elements: the original part of the building was of single storey construction, built in the 1970s; a single storey extension was added in 1992; and, due to expansion, a two-storey extension was built in 2013. The single-storey buildings are occupied by the GP practice, the pharmacy and an NHS Community Trust, which comprises of four rooms for midwifery, district nurse, health visitors and physiotherapy. The two-storey extension is purely occupied by the GPs.
The original two-storey building was occupied by the GP practice on a 99-year lease and was owned by a local charity, The F Glenister Woodger Trust, which also owns the adjoining two-storey extension.
With this established relationship between the landlord and tenants, Primary Care Surveyors were able to discuss the proposition with the Trust, to see if there was the appetite to purchase the freehold from the Witterings Medical Centre and lease it back to the them in a ‘Sale & Leaseback’ proposition. There was the appetite, and the Trust agreed. The Trust purchased the remaining single storey building for £1.5m, and two leases were drawn up. The first was a new, 16-year lease for the General Medical Services side of the business, which included the GP practice, with the Pharmacy being given a new 16-year lease. The lease for the NHS Community Trust accommodation is still being agreed and will be finalised in the not too distant future.
Adam Thompson of Primary Care Surveyors comments: “We are seeing more of this type of property adjustment in the primary care sector, with a common theme being doctors coming into General Practice who don’t want to invest in the property aspect of the business. On this occasion it was an amicable transaction with the parties having an existing relation and all parties benefitted, meaning that the practice will thrive.”
About Primary Care Surveyors
Primary Care Surveyors (PCS) was established in 2009 by Adam Thompson to provide advice on all primary care property matters, including rent reviews, valuations, lease consultancy, development and investment transactions. PCS offers a complete and integrated service to general practitioners, advising on and implementing rent reviews to maximise the value of the practice property. It looks creatively at ways to include other service providers, thereby improving returns on the property asset. PCS also acts for many commercial landlords of such properties and provides advice on asset management opportunities.