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GP surgeries should receive 45% more rent from pharmacy tenants

13 May 2014

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Here at GP Surveyors, we work closely with GP surgery landlords nationwide to ensure that their pharmacy tenants are paying fair rent

In the majority of cases, our evidence shows that pharmacies are paying rents which are far too low. In fact, in the last three years (2011-2013), GP Surveyors negotiated average pharmacy rent increases of approximately 45% which amounts to £6,885 per client per year.

To put this into long term context, an increase of £6,885 per year over a 25-year pharmacy lease would amount to a total increase in income of £172,125 over the full term for the GP practice!

One of the largest increases negotiated was 207% (£33,908 per year). This amounts to £847,700 over the full 25-year lease which is a huge uplift in income from the practice!

Given that GP surgeries across the UK are struggling so much financially, this is really something that they need to address.

What can GP surgery landlords do about it?

It is up to you, the GP surgery, to take action to ensure that you are receiving the appropriate amount by actioning the rent review opportunities detailed in your lease.

Speak to your specialist surveyor who will:

 – Check that your pharmacy is valued using the correct methodology. At GP Surveyors, we often find that this is not the case where surgeries have used non-specialist surveyors in the past.

 – Compare the rent that you are receiving with rents paid by other pharmacies in similar areas, in similar buildings and in similar sized GP surgeries. This will allow them to come up with a fair and reasonable valuation.

 – Negotiate this valuation with your pharmacy’s surveyors to come to an agreement.

 – Advise you on how you can review pharmacy rent retrospectively and back date any rental increases.

Why are pharmacies paying too little?

It is very common for surgeries to accept rents from pharmacies which are too low because:

 – At first glance, the rent the pharmacy offers may appear to be high for the small amount of space that they plan to occupy. However, on closer inspection, when the patient numbers are taken into account, the rent is not as high as it should be.

 – Pharmacy companies will often initially offer surgeries high premiums which may be great at the beginning of the lease however the premium can disguise a lower rent. Therefore, the premium quickly wears off leaving the surgery out of pocket at the end of the 15-25 year lease.

Want to start leasing space to a pharmacy?

Pharmacies generally don’t need a lot of space to operate so you may actually be able to accommodate one even if you don’t have much space.

They will also often pay for any alterations required to the surgery premises. This was the case with Coppull Medical Centre in Lancashire who increased their income, enhanced patient experience and boosted the market value of their surgery by 20% when they installed a pharmacy into their premises.

Pharmacies aren’t the only solution

It is important to note that this advice does not just apply to pharmacies. It also applies to any other complementary service that you are leasing space to, eg. dentists, chiropractors and physiotherapists, etc.

In addition to this, other ways to boost your income include: ensuring that you’re receiving optimum Notional Rent and claiming Capital Allowances.


For more information about pharmacy rent reviews or installing a pharmacy into your GP surgery, please contact GP Surveyors on 0114 281 5850 or email us

More information can be found on our website.