Succession and Retirement Planning – What to do with your premises?

Have you ever considered whether a sale and leaseback transaction would resolve your succession planning issues?

Or, whether putting a lease in place between the retired GPs and the existing partnership would be a better option? Here, we will explore the main premises options to consider when beginning GP practice succession and retirement planning.

When you consider a significant proportion of the GP workforce is within five years of the average retirement age of 58, putting a succession plan in place has never been so important.

You have several options when deciding what to do with your premises upon retirement, including:

Find new partners – if you have exhausted your search for a new GP Partner, you could consider bringing in or promoting a Nurse, Pharmacist, Practice Manager, or Paramedic as a partner and to purchase the retiring partners share in the premises.

Sale and leaseback – where the GP owners sell the property and simultaneously take a lease back from the purchasing party who will become the landlord of the GP Surgery.

Putting a lease in place – between the retired GP partners and existing GP partners – for those GP partners who want to retain ownership of the premises and their investment, this option is ideal.

Merging with another local practice – Merging with a larger practice or one with a ‘younger’ GP partnership age could enable you to retire and put a lease in place, with the new practice taking over your contract and becoming your tenants.

Transferring the contract to another entity – explore the possibility of your local PCN, GP Federation or a third-party organisation taking over your contract and becoming your tenants.

Closing the surgery and selling the premises – this is a last resort, and you should always seek advice from the ICB/NHS first, as they might be able to offer a solution through financing improvement works, facilitating a merger, or the transfer of the NHS contract to another entity.

How to maximise the value of your premises in anticipation of your retirement:

  • Get your notional rent checked by an independent surveyor to ensure it is in line with the current market and you aren’t getting underfunded.
  • Ensure any lease agreements and rental amounts are up to date with third-party occupiers such as co-located pharmacies.
  • Look to find alternative tenants to occupy any spare space or non-reimbursed areas of the practice – such as a pharmacy or dentist. Or seek approval from the NHS to have the space included in your notional rent reimbursement.
  • Upgrade and improve your surgery – things such as improving accessibility and infection control should have a positive effect on the value of the premises.
  • Explore the possibility of building an extension – increasing your rental income can significantly increase the potential sale price.

Whatever you decide to do, it is essential to seek expert advice and guidance. Here at BW Healthcare Surveyors, we have helped and supported over 1,000 GP practices in the UK with all their premises related issues.

Should you have any questions or queries in regard to the above, please don’t hesitate to get in touch with one of our expert advisors on 0114 4420098.

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