As a Senior Surveyor in our dedicated Healthcare team, Bella Darby plays a vital role in supporting GP practices and investors navigate the evolving healthcare property landscape. With extensive experience in commercial property valuation and a deep understanding of NHS processes, Bella offers valuable insight into the unique challenges and opportunities in the sector. We sat down with her to discuss key trends, practical advice for practices, and what it’s like working in this specialised and rewarding field.
Q1. You work with both GP practices and investors – what are the key differences in their priorities when it comes to property, and how do you balance those interests?
Ultimately both practices and investors seek modern medical centres and look for ways to improve their accommodation in order to be the most compliant and achieve the highest notional rent assessments. When looking at GP practices they can either be owner occupiers or Tenants. Owner occupiers will be concerned about the value of their property in the longer term as well as the rent reimbursement they receive, whereas Tenants will mainly want to ensure their lease rent is covered by reimbursement. Investors will want to seek the longest lease terms and highest rents possible. All this can be balanced by ensuring the properties involved are supported by the ICB in the NHS Estates plan and eligible for reimbursement.
Q1. What are some common challenges GP practices face when it comes to lease renewals or rent reviews and how can they best prepare for them?
The NHS Premises Costs Directions 2024 has changed the process slightly when dealing with rent reviews. Previously we could discuss rental levels directly with the District Valuer but the changes focus on requiring evidence of negotiation between Practice (contractor) and landlord before the NHS will consider any proposals. This has caused some confusion in recent months as practices and landlords get used to the new process. We encourage practices to discuss the process with us so that we can ensure they understand fully what is required of them. The lease renewal and rent review process is very long, with ICB and DVs being understaffed and therefore early preparation and prompt action is important. There is also a new 12 week deadline to decide whether to reject a rental proposal, otherwise it is automatically assumed to be accepted.
Q3. What trends are you currently seeing in the healthcare property market, particularly with regard to GP surgeries?
In terms of GP Surgeries and medical centres from an investor perspective the fundamentals of the market remain positive with NHS backed rental income, an increasing demand from patients for GP services and a growing UK population, the opportunity of longer lease terms than the average commercial property and regular rent reviews, typically with three year cycles. Rents have generally continued to increase over the last few years, but the review process is slow with NHS procedures and lack of resource to deal with them.
There is a strong appetite for grant funding for extension and refurbishment, with build costs and lack of funding meaning that new developments are limited, in comparison with the demand resulting from an aging stock of properties.
The Pharmacy market is struggling at present and some pharmacies are choosing to vacate their premises at lease renewal rather than renew.
Q4: What advice would you give to someone considering a career as a surveyor in the healthcare property sector?
I moved to the Healthcare team at Aitchison Raffety two years ago after over a decade in commercial property valuation. I would highly recommend specialising in the Healthcare sector to another surveyor but also caution that there are fundamental differences in terms of the notional rent process and specific adjustments which need to be factored in to valuations which will require some getting used to. However, our team at AR are brilliant and offer plenty of support when you are starting out.
Q5. If you weren’t a surveyor, what career would you be doing instead?
If I wasn’t a surveyor I would probably be working in a role to help the environment. I love the outdoors and nature so I would probably volunteer to help in and around Norfolk.
A big thank you to Bella for sharing her insights and offering such valuable advice. We’re proud to have her as part of the Aitchison Raffety Healthcare team and look forward to seeing her continue to thrive in her career.
If you’d like to speak to our Healthcare team, please contact us by phone on 01727 844555 or via email at healthcare@argroup.co.uk.