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NHS landlords review Lloydspharmacy sites after rent reduction plea

NHSPS is conducting a “full review” of the sites Lloydspharmacy leases from the organisation, after the multiple asked health centre landlords for a 25% rent reduction last year.

In November 2020, Lloydspharmacy announced that it had closed 99 pharmacies in the previous 12 months and that it needed more support from landlords to avoid further closures.

The multiple revealed that it was asking its health centre landlords, including NHS Property Services (NHSPS), for a 25% rent reduction, in recognition of “COVID-19 related costs and reduced footfall”.

But NHSPS was “refusing to recognise the impact of reduced footfall”, Lloydspharmacy claimed at the time. NHSPS told C+D that it had written to the CEO of McKesson UK – Lloydspharmacy’s parent company – in early November, to suggest “practical and tangible solutions”, but said it had not received a response from the multiple.

More than four months later, an NHSPS spokesperson told C+D on Tuesday (March 23) that the organisation “has been actively engaging with Lloydspharmacy on this issue and is in the process of conducting a full review of the sites they lease from us”. 

Lloydspharmacy currently rents 12 sites from NHSPS, the spokesperson confirmed.

NHSPS said it has “requested additional information from Lloydspharmacy to complete this work” – which includes the outcome of some internal reviews the multiple is conducting, as well as some prescribing rates data.

“[We] will discuss a way forward with the company once this is done,” they added.

A Lloydspharmacy spokesperson confirmed to C+D that the multiple is “in dialogue with NHSPS”.

“No attempt from several landlords”

Lloydspharmacy has had “positive discussions” with some of its landlords, “who understand the importance of the long-term viability of pharmacy”, the details of which “remain confidential”, the spokesperson added.

However, they said there are “still several landlords that have made no attempt to acknowledge that the impact of COVID-19 and associated costs should be worked through together”.

In 2019, Lloydspharmacy decided to close its branch in Weston Favell Health Centre, Northampton, following NHSPS’s decision to “double our rental price”, McKesson UK CEO Toby Anderson said at the time. 

Rowlands: “Ongoing discussions”

Last year, Rowlands also told C+D it was “in discussions” with NHSPS to negotiate rent reductions. It argued that a “review of health centre rentals is long overdue”, and that rents need to reflect “the reality of current circumstances”.

A Rowlands spokesperson told C+D this week that “discussions with landlords are ongoing and are commercially confidential. As such we cannot comment further”.

An NHSPS spokesperson told C+D today that it has been “in dialogue with Rowlands over the past twelve months” and is working to find a solution that “works for all parties”, but that can also achieve “best value for the wider NHS”.

Last year, Rowlands closed its Colne Health Centre Pharmacy in Lancashire after discussions with NHSPS failed to result in a rent reduction.

Have you suffered financially from high rents for your pharmacy?

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