This site is intended for health professionals only

Small GP practices face closure, say property experts

3 July 2008

Share this article

Pressure will increase on GP practices to consolidate – with potentially some smaller ones closing – as a result of government plans to transfer medical services from hospitals to primary care, according to Colliers CRE Healthcare Consultancy.

The national property experts believe property investors interested in this “fast-changing” sector and medical practitioners face an uncertain future.

In a review published by the consultancy group, the authors claim that consolidation will be prompted by increasing pressure on practices to gain critical mass through increased patient lists.

“In order to be a high-quality provider, there will be a need for high-quality premises as the government looks for a competitive, contestable environment,” the review states.

But it warns that, given the current regulatory reforms, the situation and available statistics were “moving targets” that would need to be revised later in the year.

The review highlights the fact that a large proportion of practice premises are in need of upgrading or updating. The NHS Executive’s refurbishment target of 55% is to be reviewed later this year, while colocation with other service providers would require new buildings and bigger sites.

The medical sector’s main banks were lending at 100% loan to value, and although this was subject to affordability tests, the banks were positive and upbeat.

Adam Thompson, a Director of the Colliers CRE Healthcare Consultancy, said: “The credit crunch has not had an adverse impact on bank lending to healthcare properties, a sector they consider to be a haven.

“The primary care property market is less volatile than others, and although 20 years-plus leases are commonplace there is a push for shorter, more flexible sub leases.

“The introduction of shorter leases and break options would bring the sector in line with the retail and office sectors,” he adds.

But he warned: “Investors remain concerned about alternative uses of the buildings, which are restricted by the nature of primary healthcare properties. In addition, shorter leases may deter investors and healthcare will no longer be seen as a haven.”

Colliers CRE

Your comments: (Terms and conditions apply)

“Wouldn’t it be nice to see how much potential revenue was lost in Scotland by them operating procedures that provide free care there as against care that has to be paid for south of the border.  Even if it helped you could guarantee that the Scottish MPs in the Commons (Labour) would not reverse decisions which would lessen the tax burden on us sassenachs and lose them votes at the ballot box.  These are obviously not the boundaries (the borders with Scotland and Wales) that Darzi talks about removing for joined-up treatment. There is no such thing as a NATIONAL Health Service for the United Kingdom of Great Britain and Northern Ireland; just four separate ones” – Name and address withheld