Ask The Experts - Surgery Valuer

Answer

With falling values in relation to leased premises, most lease rent review clauses are upward only.

Alternatively they may be upward or downward but only the landlord can implement the review and thus there is no benefit to the GPs. As long as the primary care organisation is reimbursing the rent, the GPs are not adversely affected.

This is unless the GPs inadvertently put in place a review, when a district valuer can report in to reduce reimbursement even though the lease rent will stay as before.

Rents on good quality medical premises are, at worst, staying firm and, at best, still showing signs of increases although probably only at 3 per cent a rent.

There are notable variations. Converted and older style medical properties are at best showing stationary rents but some rents will be falling and three to five-year-old centres are increasing up to 7 per cent a year.

The biggest affect has been on capital values where yields on property have risen substantially. (A rising yield means falling values).

Due to NHS funding, the adverse affect has not been as bad as for general commercial property and falls in value have only been a t about half the rate.

But there are still falls which will especially affect GPs who bought surgery shares a year ago when values peaked.