Exclusive A private development company buying up GP premises grew its portfolio by more than a fifth last year, as GP partners were increasingly reluctant to buy in to premises commitments.
Assura, which buys GP premises off partners and then leases them back under a management contract, increased its portfolio from 265 total properties to 321 in the year to 31 March 2016 – a 21% growth, and up from 202 in 2014.
The company has calculated its underlying pre-tax profit grew by 78% for the same year driven by increased rent collection from GP practices.
Assura told Pulse that one reason for the growing interest among GP partners in selling premises to a management company is that GP practices struggle to recruit partners if these have to buy into property.
Development manager Simon Gould said: ‘I think that there is a trend that new GPs are less inclined to buy into the bricks and mortar of surgery buildings when they become partners. So they would much rather be on a leasing arrangement, which is a lot more flexible and means that they don’t have to raise a large loan, or mortgage, to buy in to the building.
‘It has been well-documented that it is quite hard to recruit new partners at the moment, and so having a leasing arrangement is a bit more attractive to a lot of incoming doctors.’
He said it was also seen as an exit strategy for partners planning their retirement, as they struggled to find younger GPs to take over.
Mr Gould said: ‘The age profile of GPs means that there are lots of doctors who are approaching retirement age and want to release the equity from their properties that they own.’
He said Assura has also noted that ‘there is more pressure on GPs generally’, meaning they did not have time to ‘worry’ about managing the surgery building.
He said: ‘They would much rather focus on running the clinical services.’
It comes as Pulse revealed last week that around 12% of all GP posts in the UK are vacant, the highest proportion recorded.
GPC deputy chair Dr Richard Vautrey said: ‘There is an increasing trend for GPs to look for a third party to own and manage the building they work in as the risks of premises ownership have increased in recent years.
‘This has just added to the stress of partnership and has played a significant part in the GP recruitment and retention crisis with premises ownership being a key factor that is putting off some salaried GPs choosing to become partners, particularly when they may have other significant debts, such as student loans to cope with.’
Assura is also ‘working with a number of practices to put forward proposals’ for the Estates and Technology Transformation Fund (formerly primary care infrastructure fund) to ‘do improvements to and expand existing buildings’, while CCG co-commissioning was also helping to improve slow investment into GP premises, said Mr Gould.
He said: ‘We are starting to see some projects moving forward and business cases being prepared for them.’
It comes as another GP landlord firm, Primary Health Properties (PHP), grew its pre-tax profits by 50% at the half-year mark last year.