28/01/2022
NHS Confederation together with other healthcare commentators in the property sector have highlighted the opportunities for NHS providers and commissioners to help reinvigorate high streets or aging shopping centres by providing health services appropriate for community settings from vacant retail property. In doing so, the NHS can take advantage of a wide choice of vacant property in the current economic climate (often with attractive rents or other tenant incentives), whilst broadening the range of services provided across local communities.
We’ve been helping many NHS providers take surplus retail space over the last year, for a range of uses including vaccination programmes, COVID testing centres and community diagnostic hubs, amongst others. As part of this process we’ve seen three key issues emerge from the lease negotiations which it’s important to bear in mind when agreeing arrangements with retail landlords:
- Service charge: if the landlord is providing estate services (which is usual in shopping centres), do you have all of the necessary information regarding estimated charges and any charges for previous years? What do the services comprise, are they appropriate for your requirements? Have you factored in the additional – and sometimes hefty – service charge into your business case and financial model for the new facility over the lifetime of the lease, on top of the rent?
- Hours of access: retail premises, especially in shopping centres, often have specific hours of access during which the premises must stay open, and there may be significant restrictions on being allowed to open outside of these core hours. Are there any “keep open” obligations or out of hours restrictions for you? If so are there any additional costs chargeable by the landlord in allowing you to open outside of core hours, such as additional site security or utilities costs for the common areas? Can you negotiate any “carve outs” from these arrangements?
- Permitted use and planning permission: Does the landlord’s existing permitted use for the retail space allow you to use the space for the purposes intended? Does the current planning permission for the use of the premises cover your proposed use of the space? In the event you need to carry out alterations works to the retail space, has this been approved in principle by the landlord and/ or do you require planning permission or building regulations consent to the works?
Our specialist healthcare property lawyers here at Bevan Brittan are here to guide you through the legal negotiation process. Let us know if you’d like an initial chat about any of the above issues – we’d be delighted to help.
If you would like to discuss this topic in more detail, please contact:
