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Rowlands asks for rent drops while AIMp reports ‘exorbitant’ increases

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NHS Property Services: “We welcome dialogue with pharmacy occupiers”
NHS Property Services: “We welcome dialogue with pharmacy occupiers”

Rowlands is in discussions with its landlords for a rent reduction, while AIMp members have flagged “exorbitant rent increases” on health centre lease renewals.

“Local crippling rentals” and the pharmacy funding austerity in England are pushing many pharmacies “to the point of closure,” a Rowlands spokesperson told C+D earlier this week (November 23).

The multiple is “in discussions” with landlords, including NHS Property Services (NHSPS), to negotiate rent reductions, which it said would allow “us to continue providing essential healthcare services and advice which communities want, need and trust”.

Rowlands also believes that a “review of health centre rentals is long overdue” and that rents need to reflect “the reality of current circumstances”.

“The current [rent] levels and landlords’ expectations are no longer fit-for-purpose. The COVID-19 pandemic has made that abundantly clear,” the spokesperson added.

Colne Health Centre Pharmacy in Lancashire, which was part-owned by Rowlands, was forced to close on August 28 after NHSPS said it “was not in a position” to reduce the rent.

AIMp: “Exorbitant rent increases”

Association of Independent Multiple (AIMp) CEO Leyla Hannbeck told C+D earlier this week (November 23) that many AIMp members “have reported exorbitant rent increases on health centre lease renewals from landlords”.

The organisation is surveying its members to understand how these issues are affecting them it will feedback any relevant information to the landlords.

More health centre branches will relocate

An anonymous pharmacy contractor who supervises a small pharmacy chain told C+D earlier this week (November 23) that, due to high health centre rent rates, they have already relocated two branches previously sited at two health centres and are planning to relocate more branches when their leases expire over the next couple of years.

The contractor said they are aware that other pharmacy owners have relocated from health centre sites “due to unreasonable rental demands” from NHSPS.

The introduction of the electronic prescribing system (EPS) and later the outbreak of COVID-19 means “footfall in health centres has dropped off dramatically”, according to the contractor.

“Landlords are prepared to stick to old-fashioned methods of evaluation, and they are not taking into account what is currently going on in the world,” they added.

Dialogue “welcome”

An NHSPS spokesperson told C+D earlier this week (November 24): “As with all of our pharmacy occupiers, rent is set at open market levels with reviews subject to indexation or market evidence.

“We welcome dialogue with pharmacy occupiers and are keen to discuss a variety of practical and tangible solutions. It is only right that we offer bespoke site-by-site help to ensure that communities retain these vital services.”

Last week, Lloydspharmacy announced that it was seeking a 25% rent reduction for nearly a quarter of its English sites, for which NHSPS is the landlord, to avoid further pharmacy closures.

5 Comments
Question: 
Is your pharmacy located in a health centre?

James Hesp, Pharmacy owner/ Proprietor

I cannot see NHSPS budging on rents when they ultimately are wanting more pharmacies closed. This is an ideal tool for them to make that happen. 

C A, Community pharmacist

I'm not sure they will close, so much as relocate. Which means that the NHSPS will have 100% of zero rent. So the question is - Is it better to have 75% of something than 100% of nothing?

Sunil Patel, Pharmacy owner/ Proprietor

This article is useful. This a big problem in some areas. Good to see some organisations are taking action on behalf of their members. 

Leon The Apothecary, Student

If you can't afford it, then move out. I'm sure the health centre's financials will be completely unaffected by the loss.

C A, Community pharmacist

How does the rental work? I always thought it was beneficial for the health centre to have a co-located pharmacy - do they not get a portion of the rent, or a reduction from the NHSPS as they aren't using 100% of the building?

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