Older style 1980’s and 1990’s properties owned by GP practices are in increasing demand by the niche primary care investment funds, according to the specialist primary health team at Bilfinger GVA.
Frank Convery, Director at Bilfinger GVA, observes that an increasing number of GP practices are successfully releasing equity from their practice premises to enable further investment.
“We’ve been seeing strong demand from specialist funds for older primary care stock, which in turn has been driving up values,” he says.
“With GP practices increasingly facing succession issues and a growing recruitment problem, partners are looking for new methods of practice ownership to introduce greater flexibility into their practices. This can help reduce costs for new young GPs joining a property-owning partnership.”
The sale and leaseback model is a popular way for GP partnerships to release equity, so reducing a capital burden or enabling further investment.
A sale and leaseback involves the GP partnership selling their surgery to a specialist investor and taking a leaseback of the premises while remaining in the practice. The lease would be granted back to the partners, allowing continued exclusive use and rights over the business.
Frank continues, “In Wales a standard “Exemplar” lease has been agreed offering considerable protection for the GP practice as tenant, ensuring that the practice remains effectively cost neutral in respect of rental payments.
“The market is strong due to the lack of new development stock coming to the market so the niche investors in the market are paying top prices for good quality, existing surgeries.”
He adds, “Since the referendum it is our understanding, following discussion with specialist primary care investors, that Brexit has had no immediate impact on sentiment. Investment transactions we have in hand (both sale and leaseback and standing investments) have not been re-priced as a result and no noticeable change has been made in this particular market place.”