GP Surveyors Admin, Author at GP Surveyors

Whetstone Medical Centre

Long term client benefits from another successful Notional Rent review.

GP Surveyors have been working with Whetstone Medical Centre for over 10 years, checking and challenging their Notional Rent figure and achieving significant increases for the surgery on two occasions. When Anita Jones, Whetstones Practice Manager, received the surgeries latest Notional Rent figure her first call was to GP Surveyors.

After discussing the matter with her Client Manager, Anita instructed GP Surveyors to check the District Valuers (DV) proposed 2018 Notional Rent figure.

Once we were instructed to carry out the surgeries Notional Rent review, the case was allocated to one of our experienced Valuation Surveyors, Nathan Young. To ascertain if the surgery had a case to challenge the DVs Notional Rent assessment, Nathan began checking the surgeries proposed figure against our vast database of comparable evidence.

When comparing Whetstone Medical Centre with like for like premises in the locality, Nathan found there to be sufficient evidence to put forward a strong case to challenge the surgery’s initial Notional Rent figure.

Nathan’s case was based on the following factors:

Whetstone Medical Centre is a thriving practice, situated in Birkenhead and based in a purposed built 1970’s surgery, therefore, it should be placed in line with similar properties in the locality
Larger first-floor area is eligible for reimbursement
Low unit price per square meter
Low price per parking space

Having sent his case to the DV, Nathan began negotiations to increase the surgeries Notional Rent reimbursements. Drawing upon our vast database of local comparable evidence Nathan was able to successfully negotiate the surgery an increase of 4.16% above the DVs proposed notional rent figure. This increase resulted in a great boost to the surgery’s annual income and a significant increase over the 3-year review period.

The increased Notional Rent was backdated to the review date stated on the surgeries CMR6 form and the funds paid to the surgery in a lump sum.

Anita and the practice were delighted with the outcome of GP Surveyors Notional Rent challenge.

Anita Jones, Practice Manager, said:

“Excellent service, kept me fully informed at every stage, efficient and friendly service with a successful outcome. I would certainly recommend GP Surveyors.”

Furthermore, the increase in the surgeries Notional Rent is highly likely to have increased the investment value of the property.

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Ainsdale Village Surgery, Merseyside

Ainsdale Village Surgery Notinal rent case study

GP Surveyors carried out Ainsdale Village Surgeries maiden Notional Rent review this year and we’re pleased to say they had a fantastic outcome.

Dr. Lindsay McClelland, (Principal GP, Ainsdale Village Surgery) first got in touch with GP Surveyors after receiving the surgeries CM6 figures from the District Valuer (DV). The surgery was informed that their rent had been changed from cost rent to Notional Rent. Unfortunately, on this occasion, the surgery was subject to a clawback for the previous 3 years of rent. The clawback was due to the change in rent type not being put in place by the NHS as part of the surgery’s previous review.

Once instructed by Dr. McClelland, one of our highly experienced surveyors, Nathan Young, was allocated the case, and a convenient time was arranged for a full inspection of the surgery.

Nathan met with Dr. McClelland at the surgery and carried out a full inspection of the premises. Nathan then compiled his findings and compared the DV’s initial Notional Rent valuation, with our vast database of comparable evidence. Based on our evidence, Nathan concluded that there was sufficient evidence for GP Surveyors to challenge the DV’s initial valuation of the surgery, on the practices’ behalf.

The basis for the case

Ainsdale Village Surgery is a superbly converted detached house, fitted to a good surgery specification, which is close to that of a purpose-built practice. Therefore, Nathan believed the unit rate attributed by the DV to be low when compared to practices in the locality.

Additional factors included;

Ground floor areas larger than in DV’s proposed valuation
First-floor area larger than in DV’s proposed valuation
Surgeries pram store eligible for inclusion.

Nathan presented the above case, alongside his comparable evidence to the DV and began negotiations to increase the surgeries Notional Rent reimbursement. Due to the findings of Nathan’s inspection and GP Surveyors strong comparable evidence, the DV agreed upon all the factors in Nathan’s case.

The outcome of the case was that Nathan successfully secured a fantastic increase of 13% above the DV’s initial Notional Rent valuation. This resulted in a significant uplift in the surgery’s income, which was a great boost for the surgery and helped mitigate the impact of the NHS clawbacks.

The surgery was delighted with the result, Dr. Lindsay McClelland commented;

“As a practice we were very impressed with the service we received from GP Surveyors. With very little input on my part, we were able to achieve a rent increase and back payment which we were delighted with. The GP surveyors staff kept me updated via telephone and email throughout the process. Excellent service with minimal stress and input from the GP partners.”

In addition, the surgeries increase in Notional Rent is likely to have significantly increased the investment value of the property. Your surgery could be due an increase in Notional Rent just like Ainsdale Village Surgery – contact our team today and check your Notional Rent.

Crown Street Surgery, Mexborough

Crown Street Surgery receives a substantial uplift in pharmacy rent following their pharmacy lease renewal.

Crown Street Surgery required a new pharmacy lease to be put in place between themselves (the landlords) and their pharmacy tenant, due to the expiry of the existing lease. GP Surveyors had previously undertaken several successful notional rent reviews for the surgery, the first being in 2005, so naturally, we were the surgeries first port of call. Following discussions with their Client Manager, the surgery instructed GP Surveyors to undertake their pharmacy lease renewal.

Crown Street Surgery is a thriving practice based in purpose-built premises located in Swinton town centre, Mexborough and the pharmacy is integrated within the practice premises. The surgeries pharmacy lease expired in 2017 after the 21-year term came to an end.

Clare Kersey one of our highly experienced Senior Surveyor and RICS Registered Valuer was allocated Crown Street Surgeries case. Clare visited the surgery where she met Sarah Caddick, the Practice Manager, and carried out a full survey of the pharmacy. Having carried out her survey and discussed the required terms of the new lease with the practice, Clare completed a thorough analysis of the existing lease.

Once the lease had been analysed, Clare performed a search of our extensive database of comparable rental evidence to establish the current market rent of the pharmacy. Clare then contacted the pharmacy’s representatives to discuss the terms of the lease and the rent.

The first stage of negotiations then began and the pharmacy’s representatives were presented with Clare’s case for an increase in rent, including our comparable pharmacy rental evidence.

Following protracted negotiations with the pharmacy representative, common ground could not be agreed upon concerning the level of rent. Unfortunately, on this occasion, a solicitor had to be instructed to serve a Section 25 Notice* to the pharmacy.

*A Section 25 Notice is named after the section in the Landlord & Tenant Act 1954 (LTA) that sets out the information (in a notice) that a Landlord needs to give the Tenant to end a business tenancy.

Fortunately, the 6-month notice period served in the Section 25 Notice broke the impasse and negotiations progressed. Lease terms and rent were agreed upon by all parties and GP Surveyors secured the surgery a fantastic increase in pharmacy rent of 70% above the previous rent.

The surgery was delighted with the outcome of the lease renewal and the uplift in income, Sarah Caddick, Practice Manager concludes;

“Clare Kersey and the team run a very professional and efficient service, despite a long drawn out process the outcome was great and we finally received an amazing increase in the rent from our tenants. We will definitely use GP Surveyors again.”

GP practice rent abatements – explained

GP rent abatements – all the essential questions answers by the experts.

Why is the surgeries Notional Rent subject to an abatement?

If a surgery has received external funds to contribute towards the costs of building or refurbishment work at the practice, the NHS will abate the notional rent in proportion to the level of contribution the surgery has made.

How long will the abatement apply for?

The length of time for which the rent abatement will apply to the GP practice is dependent upon when the works were approved by the NHS.

For works approved:

Pre 1^st April 2013, the 2004 Cost Directions will apply.
Post 1^st April 2013 to 1st April 2024, the 2013 Cost Directions will apply.
Post 1st April 2024 the 2024 Cost Directions will apply

Under the 2004 Directions, regardless of the total costs of improvements, the rent abatement will run for 10 years.

The 2013 and 2024 Directions introduced new proportionate scale dependent upon the total costs of the improvements:

2013 Directions		2024 Directions
Commissioner contribution 33-66%		Commissioner contribution up to 100%
Value exc. VAT	Abatement/guaranteed use	Value	Abatement/guaranteed use
Up to £100k	5 years	Up to £144k	6 years
£100 - £250k	10 years	£144k - £360k	9 years
Over £250k	15 years	£360k - £660k	12 years
		£660k - £1.2m	15 years
		Over £1.2m	18 years

How is the abatement applied?

When the works are complete you should contact the NHS to instigate a new rent reimbursement review. The review date should be brought forward to the date the works are complete, as there has been a material investment in the property and the improved property is being used for the provision of care at that point.

In order to calculate the abated figure, the property needs to have been valued pre improvement and post improvement. The Current Market Rent (CMR) of the pre improved premises is then taken away from the CMR of the improved premises to find the value attributable to the improved works.

The amount of capital contributed by the practice towards the improvements is expressed as a percentage (with 10% added to cover landlord expenses). This percentage is then applied to the value of the improvement works, with the resultant apportioned value added to the pre improvement valuation figure.

Abatement calculation

As stipulated in the Premises Cost Directions 2024 – Schedule 3, Part 1 Notional Rent Abatements, the post improved notional rent is expressed as the following formula:
I’ (A+10)% + PU

Example

The below GP rent abatement calculation includes an example of a GP practice that has carried out improvement works and contributed 66% of the capital to the works.

(Pi) £100,000 – (Pu) £60,000 = (I) £40,000
66% + 10% = (A) 76%
(I) £40,000 x (A) 76% = £30,500
£30,500 + (PU) £60,000 = £90,500 (Total abated CMR)

Pi – Current Market Rent for the whole of the improved premises.
Pu – Current Market Rent for the premises prior to improvement.
I – Current Market Rent value of the enhancement.
A – The amount of capital provided by the practice as a percentage of the whole cost of the improvements
(10% is added to cover normal landlord expenses).

The abatement directions when applied properly ensure that the practice will receive additional rent for the fair proportion of works that they have funded and that the NHS only pay the fair proportion of value reflecting the non-practice funded proportion of the works.

If the NHS offer to fund my works 100% in exchange for contracting out of the premises costs directions, is this a good option?

There is nothing within the directions that indicate that a practice should be asked to sign away the right to receive rental uplift on improvement works. This may be deemed an unfair contract term and the directions are there to guide both sides as to reasonable expectations and conduct. Under the directions, a practice should still receive 10% of the value enhancement of the works even where NHS fund 100% of the works.

Before signing up to any such agreement, we would strongly suggest practices seek specialist professional advice.

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Family Medical Centre, Nottingham

Family Medical Centre receives a significant increase in Notional Rent.

GP Surveyors have worked for the Family Medical Centre since 2006, carrying out a number of Market Valuations and Notional Rent reviews. Elizabeth Pain, the surgeries Practice Manager, contacted GP Surveyors in 2018, to check the surgeries latest Notional Rent figure. Once Elizabeth spoke with Paul Hardman, one of our specialist Client Managers, she instructed us to check her practices Notional Rent figure.

One of our highly experienced Senior Surveyors, Clare Kersey was allocated the case and set to work. Clare scheduled a visit to the surgery to meet Elizabeth and carry out a full inspection of the premises to gather further information.

Clare compared her findings against our vast database of evidence, comparing the surgery with like for like surgeries in the area. Clare found there to be sufficient evidence for GP Surveyors to put forward a strong case to challenge the District Valuers’ initial Notional Rent figure. Clare compiled her report to substantiate the case for an increase in surgeries Notional Rent and sent this to the DV.

Clare’s case was based on the following factors:

Inaccurate floor areas
Upon inspection, Clare found the initial Notional Rent figure to be based on ground floor areas that were lower than the actual floor areas.
Low unit rate
Clare put forward the case that the surgery should be placed in line with other comparable purpose-built surgeries, with extension, in the area.

Having presented her case, Clare then began negotiations with the District Valuer to increase the surgeries Notional Rent reimbursements. Drawing upon our vast database of local comparable evidence, Clare was able to successfully negotiate the surgery an increase of 12.64% above the initial Notional Rent valuation. This increase resulted in a significant boost to the surgery’s annual income and in turn, increased the surgery’s value. Elizabeth and the practice were very pleased with the outcome the GP Surveyors team delivered.

We hope you have found our Family Medical Centre case study useful, to see our full range of Notional Rent case studies click here.

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Capsticks GP property specialist solicitors take you through the when and whys of GP lease arrangements and how they can help both your practice and PCN members.

Ardgowan Medical Practice – Greenock – Sold

GP Practice Scotland Sold – Ardgowan Medical Practice Greenock

This GP practice in Scotland is now sold, see all our available primary care properties here.

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Description

Ardgowan Medical Practice in Greenock is a large purpose-built GP surgery, dated 1994 and offers two floors of accommodation, with a large tarmac car park situated to the side of the property, which has space for
28 cars.

The ground floor is 370 sq m and consists of: eight consulting rooms, a treatment room, a training room, and an examination room. The surgery also benefits from a large waiting and reception area and an administration office. Storage areas include a medical records store, a pram bay, a cleaning cupboard, a refuse store, and a storeroom. Facilities include two WCs, a parent and baby changing room, and utility room.

The first floor is 87.8 sq m and consists of: two office suites, 2 WCs and a shower room, and a common room including kitchen.

Summary

Investment Summary
• Notional Rent: £67,650 / annum
• Patient list size: 9,190
• FTE doctors: 5 + 1 part-time
• Freehold (subject to lease to GP partners)
• See brochure and lease

Key Property Features
• Ground floor area: 370 sq m
• First-floor area: 87.8 sq m
• Car parking spaces: 28
• Purpose-built

Floor Plan

Location

Gallery

Contact

This GP Practice in Scotland has now sold, visit our for sale section to see the latest GP properties on the market.

Rebecca Adams
Business Development Manager
0114 281 5850
[email protected]

Stoneycroft Medical Centre – Sold

Stoneycroft Medical Centre, Liverpool, Sold.

Stoneycroft Medical Centre in Liverpool is now sold, see all our available primary care properties here.

To receive GP property alerts please register here.

Description

Stoneycroft Medical Centre is an excellent investment opportunity, new to the market.

The property is a purpose built GP Surgery, dated 1996 and offers two floors of accommodation, with a tarmac car park situated to the side of the property, which has space for 9 cars.

The ground floor is 245.25 sq m and consists of; 5 consulting rooms, 1 treatment room, 2 nurses rooms, a designated waiting and reception area, WC facilities, admin office and storage.

The first floor is 123.91 sq m and consists of; 6 office suites, staff room, common room, medical records store, 2 kitchens and WC facilities.