Sale & Leaseback

Do you have succession planning or recruitment issues? Do you have partners approaching retirement? If so, then would you like to release equity in the practice? Sale and Leaseback could have the answers.

What is Sale and Leaseback?

Sale and Leaseback is where a GP surgery is sold to a third party (often an investment company which specialises in the sector) and then leased back to the practice, typically for around 10-20 years.  The practice will continue to occupy the building and provide contracted medical services.

The increasing size and value of GP surgeries has meant that for some practices property ownership is seen as a burden, not least because the scale of borrowing required to buy into practice premises can become an obstacle to prospective GP partners. This is why sale and leaseback is fast becoming the solution of choice for partnerships to resolve issues such as succession planning and recruitment.

What are the pros of Sale and Leaseback?

• Reduces risk and responsibility of property ownership
• Some of the repair and maintenance of the property can be transferred to the landlord
• Releases the equity tied up in the premises
• Helps resolve succession planning and recruitment issues by attracting new GP partners who won’t have to find funds to ‘buy into’ the practice
• Assists doctors wishing to leave the practice or those approaching retirement by enabling them to simply transfer the lease to new partners
• Provides flexibility and security to the future of the practice
• Improvement works or extensions can be written into the agreement as a term of the sale
• You will be fully reimbursed for the rent you pay the landlord and can retain a % of the rent depending on your repair and maintenance obligations
• You may be able to offset your rent as an operating expense upon completion of the sale and leaseback (however, you should always consult your accountant at the beginning of the process to advise and clarify on all taxation matters)

What is the process of a Sale and Leaseback and how can BW Healthcare Surveyors help?

Firstly, strategic advice to include marketing price and options will be prepared by one of our specialist primary care surveyors following an inspection of the practice and initial meeting with the client. The marketing price will be based upon investment value of the property.

We will then draft the heads of terms for the proposed lease, through initial discussions with the partnership and drawing upon our experience and knowledge of undertaking sale and leasebacks within the primary care sector.

Ensure the heads of terms (or draft lease depending on local NHS area procedures) are agreed and approved by NHS England/CCG/The Health Board. This can be a vital stage of the process as it will indicate the level of support for the transaction and proposed lease terms.

Market the property and the approved heads of terms (or draft lease) to our extensive database of specialist primary care investors and agents. Once potential purchasers have shown interest, we will negotiate with them to achieve the best price for your asset.

Finally, we will coordinate with the NHS to ensure full approvals prior to any completion and liaise with key stakeholders including, solicitors, accountants or tax advisors to help ensure a smooth transaction.

Get in touch with one of our expert advisors today and we would be more than happy to discuss the process in more detail and explain how a sale and leaseback could work for you!