1/10/20 – Are you looking to release the equity in your surgery premises?

The number of partners of GP practices seeking early retirement is increasing, although some practices are running into difficulties when attracting new partners willing to buy into the property.

Many partners are now opting for a sale and leaseback arrangement that splits the property ownership from the practice, creating greater mobility for partners to come and go. This also minimises the influence that the property market may have over these decisions, allowing practices to concentrate on the needs of their patients and avoid distractions from issues relating to the premises.

What is a Sale & Leaseback?

The simultaneous sale of your property and implementation of a lease which allows your GP Practice to remain in occupation of the property.

What are the advantages?

  • A Sale & Leaseback releases capital from your property and simultaneously retains your right to occupy by setting up a lease between your practice as the tenant and a new landlord.
  • Removes the responsibilities and risks of owning your property.
  • The lease interest can be easily assignable to allow flexibility for changes in GP partnerships.
  • Potential recruitment issues can be avoided as new partners don’t have to buy into the property.

Demand for good property investments remains strong in the Healthcare sector. We are seeing consistent levels of interest from third party investors looking for Healthcare assets, but there remains a shortage of supply. This presents a good opportunity for owner-occupying practices to realise their asset through sale and leaseback arrangements.

The process itself involves the creation of a lease to allow the practice’s continued occupation of the property, which in turn should create a marketable property investment to be offered to prospective purchasers enabling realisation of the capital tied up in the bricks and mortar of a building.

It is important that any of Heads of Terms prior to drawing up the lease document are agreed and also approved by NHS England, as well as any proposed rental levels agreed with the District Valuer prior to signing the completed document. This ensures that the practice is protected and enhances the new landlord’s investment.

Should you wish to discuss sale and leaseback opportunities, please contact Niall O’Regan on 020 7907 3722 or via email to niall.oregan@argroup.co.uk.