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Surgery rent values

Q: Our notional rent is about to be reviewed and, with the poor commercial property market, we are worried it may be reduced. Can you advise?

A: While it is true that, overall, commercial property has probably fallen in rental value, the property market is complex. Rents vary with different types of property location, age and quality.

So just because local retail or office values have fallen, this does not mean that surgery rents have followed suit. Primary Care Premises Forum members, including specialist valuers such as my firm, have pooled all their results of three-yearly rent reviews for surgery/medical premises in 2009 and 2010.

In 2009, for 71 rent reviews, there was an average increase of 10.82 per cent. Information for 2010 is still being analysed but, initially, it is showing a smaller increase of about 10 per.

The demand for good quality medical premises has continued to grow as, without them, practices could not aspire to provide additional services and save costs by making fewer hospital referrals as envisaged by the Health and Social Care Bill.

The story is different for poor, converted premises close to the end of their lives as surgeries, where rental reductions are likely. Geographically, the 2009 figures indicate London had the highest increases and the south-west, the lowest and the remainder of England fairly even.

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