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.
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. If a retiring partner is seeking to retain their property interest because there is an unwillingness for new partners to buy in, then a lease still needs to be created to protect the respective parties’ position and this should be completed prior to the partner retiring to avoid any complications.
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.
Parties will need to consider potential tax implications before proceeding down this route and any new leases which a practice enters into needs to be approved by NHS England under the 2013 Premises Cost Directions. However with suitable professional advice, these aspects can be addressed and the time may be right to consider this opportunity.
Should you wish to discuss sale and leaseback opportunities, please contact Niall O’Regan on 0207 907 3722 or via email to firstname.lastname@example.org.