AIMp urges pharmacy contractors hit by high rentals to put pressure on NHS landlords
The Association of Independent Multiple pharmacies (AIMp) is urging contractors affected by high rentals to sign a letter urging NHS and private landlords to adopt a “more realistic approach for calculating rents”.
“Many” contractors, not just AIMp members, have approached the organisation claiming they are “being adversely affected by the higher rental figures being suggested by NHS landlords”, CEO Leyla Hannbeck told C+D today (June 14).
In the letter – circulated for AIMp members to sign yesterday (June 13) – AIMp wrote that the “rental figures being suggested by NHS landlords reflect historical market conditions and not the current market position”.
C+D has approached NHS Property Services (NHSPS) for comment.
“Several factors which cannot be ignored”
NHSPS currently calculates rental value by multiplying the patient numbers of the co-located GP practice(s) and “a value per patient”, AIMp said in its letter.
“Evidence shows the cost per patient ranges from around £1.74 up to as much as £5.00 in some cases,” according to the letter.
This means that quoted rents for co-located pharmacies are sometimes “well above” the rent of a “similar sized unit” in a different community setting.
“The size of the pharmacy unit cannot be ignored when calculating rent reviews and lease renewals,” AIMp argued.
An increase in online GP appointments and consultations, and the popularity of online and distance-selling pharmacies – partially accelerated by the COVID-19 pandemic – have contributed to changes in patients’ habits.
These factors “cannot be ignored when calculating rent reviews and lease renewals based on patient list sizes”, AIMp added.
While changes to patients’ habits have meant that their “value” to the pharmacy “has reduced” in terms of footfall, contractors face mounting costs to serve their patients.
Other factors that fail to consider “the current market position... which cannot be ignored” include the fixed five-year pharmacy funding contract, which “does not include any inflationary increases to account for rising costs”, AIMp argued.
“This is for everyone affected”
All contractors affected by this issue, not just AIMp members, are invited to sign the letter, Dr Hannbeck told C+D today.
“We are looking to capture as many signatures as possible and send [these] to NHSPS by the end of June,” she added.
Contractors who wish to sign the letter must send their full name and pharmacy’s name to [email protected] by June 24.
In 2020, AIMp told C+D that many of its members had “reported exorbitant rent increases on health centre lease renewals from landlords”.
Meanwhile in April, NHSPS told C+D that it had decided not to grant rent reductions to Lloydspharmacy and Rowlands branches in health centres, following the outcome of their rent reviews.
Responding to the review, a spokesperson for Lloydspharmacy told C+D that the method NHSPS uses to determine the rent for pharmacies located in health centres, is “outdated and no longer fit for purpose”.
Meanwhile, last month, a pharmacy contractor with branches across east London claimed to C+D that NHSPS had suggested the rent for his co-located pharmacy could increase by as much as 220%.