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Accommodation
The property has been measured by BKR Floor Plans and provides the following Gross Internal Areas:
| Surgery | ||
| Ground Floor | 431.33 sq m | 4,643 sq ft |
| First Floor | 172.42 sq m | 1,856 sq ft |
| Pharmacy | ||
| Ground Floor | 59.46 sq m | 640 sq ft |
| Total | 663.21 sq m | 7,139 sq ft |
A set of floorplans is available to download, and the measured survey will be re-addressed to a purchaser at a cost of £690 + VAT.
Site
We understand that the site area is approximately 0.53 acres (0.21 hectares) providing a low site cover of 27%.
EPC
The property has an EPC rating of “B” which is valid until 25th October 2033.
Rateable Value
According to the VOA website, the rateable value for the property is as follows:
| Pharmacy | £9,300 |
| Surgery | £24,000 |
The business rates multiplier is 49.9 pence.
Tenure
Freehold.
Tenancies
The property is entirely let to Jonathan Shribman, David Miller, Robert Martin and Robert Kilpatrick (t/a Bugbrooke Medical Centre & Pharmacy) on a full repairing and insuring lease for a term of 25 years from 21st July 2010, expiring 20th July 2035 (approximately 9.5 years unexpired).
Although the property is let on an overriding lease, the surgery and the pharmacy are separately rentalised:
SURGERY
The surgery is let at a current passing rent of £90,420 per annum. There are three yearly open market rent reviews.
The current rent was agreed at the 21stJuly 2022 rent review, having risen from £86,233 per annum. The 21st July 2025 rent review is currently outstanding. [TBC]
It appears that the rent of £90,420 per annum was documented at the 21st July 2022 rent review, which means that the 21st July 2025 rent review is currently outstanding. Is this correct?
PHARMACY
The pharmacy is let at a current passing rent of £19,050 per annum. There are five yearly open market rent reviews, the next being on XXX.
Please clarify. According to the lease, the pharmacy rent review dates are “for so long as the Pharmacy Leases are still subsisting and have not been determined the dates upon which a review of the Pharmacy Reny fall due under the terms of the Pharmacy Leases but otherwise the date of termination of the Pharmacy Leases and every fifth anniversary thereof”. You have advised that the pharmacy leases have expired.
The current rent was agreed at the XXX rent review, having risen from £17,000 per annum.
The rents were agreed with the NHS and District Valuer appointed by the NHS by reference to comparable evidence in relation to GP surgeries in the locality.
Therefore, an investor will benefit from an income of £109,470 per annum.
Covenant
Bugbrooke Medical Practice is an NHS primary healthcare provider offering personalised care services. The practice is part of the Integrated Care Board (ICB) and a member of the Blue Primary Care Network (PCN).
Bugbrooke Medical Practice is an accredited training practice and for many years has been involved in the post graduate training of fully qualified doctors who wish to enter the speciality of general practice.
The surgery’s overall rating from the Care Quality Commission (CQC) is good (report is available to download).
Bugbrooke Pharmacy’s services include prescription services, healthy living services, vaccination services and contraception services.
In accordance with The National Health Service (General Medical Services-Premises Costs) Directions 2024, the NHS reimburses doctors for their premises costs. Rent for GP practices is based on the Current Market Rent (see Section 5 of the Directions) set by either a District Valuer or RICS Surveyor to reflect fair market value
In effect, the rent is under-written by the NHS, thereby providing highly secure income for an investor.
VAT
The property is not VAT elected.
Proposal
We are instructed to seek a figure of £1,500,000 (One Million, Five Hundred Thousand Pounds) subject to contract, reflecting a net initial yield of 7%.
Please note that a purchaser will be re-charged the costs of the measured survey (£690 + VAT) and searches (£xxx) which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of £10,000 plus VAT.
Investment Considerations
An opportunity to acquire an NHS healthcare investment;
Highly secure income, with the rent effectively underwritten by NHS England;
Lease expiring in July 2035, providing an attractive unexpired lease term;
Future potential for residential development, subject to planning;
Freehold;
A purchase at the asking price reflects an attractive net initial yield.
Secure and robust sector with growing demand due to aging UK population.
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