In the national property market, Primary Healthcare is one sector that seems to be plotting a smooth and steady upward course. Seen as a safe haven for investors, continued interest in these properties mean values are rising despite the macroeconomic environment in the commercial world.
While Primary Healthcare property may not be feeling the same impact as commercial markets from the pandemic or inflationary pressures, it is still important to have your rent reviews analysed by specialist surveyors to make sure they are at the right level. Rents are generally moving in an upwards direction, whether these are leased or owner occupied properties via Notional Rent reimbursement.
Notional rent reimbursement for owner occupied premises and lease rents for tenanted properties generally follow a three yearly rent review pattern (sometimes five yearly). We recommend that specialist surveyors advice is sought at each review to ensure that any increase in rent is justified. The rental level for a given property is based on evidence in the local area and Aitchison Raffety handles a significant number of rent reviews throughout the country and therefore has a substantial amount of comparable evidence to help achieve the correct level of rent.
It is also important for owning partners to know the value of their property, for example when there are changes to the ownership model, either as partners retire or additional new partners are entering into the partnership. This will ensure the correct payments are made to exiting partners and the correct amount is paid by incoming partners. Another reason for an up to date valuation would be if the owning partners sought to sell their property to an investor which would normally be completed in the form of a sale & leaseback transaction. This would involve putting a lease in place for the practice when an investor purchases the property providing them with income throughout the lease which is normally around 15 years or more. Regular valuations will help avoid any surprises to the partnership and should be considered even if no changes in structure are on the horizon. Generally, values are increasing as investor appetite is strong, especially for good quality purpose built medical centres.
It is essential that an experienced valuer is instructed to value the property. A surveyor with experience in the Primary Care Industry would be the most competent individual to carry out the valuation and will ensure that the correct valuation is applied to a building, as well as being able to properly advise on any implications. This reduces the risk from an investor perspective and increases the likelihood of a successful sale or purchase. Aitchison Raffety has more than 25 years’ experience in the surveying industry and undertakes valuations for partnerships, secured lending valuations for major lending companies and portfolio valuations for large investment companies. We have successfully provided hundreds of valuations for clients across the UK and have had great success advising on and resolving issues in achieving the maximum price for surgery premises.
We advise a wide range of clients nationally including banks, landlords, tenants and doctors. The services we offer include valuations for the healthcare sector, secured lending valuations, Notional Rent appeals, lease renewals, rent reviews, sale & leaseback options, building and condition surveys, planning and management.