Medical professionals often ponder the benefits and disadvantages of owning their own medical property. In terms of property terminology, medical properties are listed under D1 properties which incorporates schools, day nurseries, religious and community buildings as well as medical, pharmacy, elderly care and dental establishments. At Savoy Stewart, we have a number of highly experienced property agents who will guide you through your decision on whether to own or lease a medical property for your individual healthcare sector.
Before endeavouring to find medical premises, you must be clear of your business objectives as buying a property will affect your long-term business plans and business goals.
Healthcare property is a versatile business and medical professionals seeking to rent or buy a property should clearly understand the market, consider location and expansion plans.
What businesses would require a health care property?
The healthcare sector encompasses health care professionals such as doctors and dentists who are looking for practical medical space for GP surgeries, dental premises, medical centres and pharmacies. There are those who are also looking for research and development (R&D) laboratories, medical office space, private hospitals or clinics. Medical properties also encompasses care services for disabled and mentally ill people such as special educational schools and children’s homes for those with learning difficulties.
What should you consider when deciding to own or lease medical office space?
Cost control: Buy or rent?
Costings are commonly the most important factor when deciding whether to own or lease a medical office space or medical premises. If you decide to lease, typically costings are far less as you do not need to outlay money upfront compared to buying. If you are to lease, your upfront cost will be your rent deposit and first quarter’s rent. However you should consider other factors such as whether any equipment can be easily moved if a move is necessary and the costs involved. For many businesses seeking to expand a business, leasing a medical property is a cost-effective method and allows easier business expansion as any capital can be used to expand the property rather than being tied up.
On the other hand buying a medical property also has its benefits and any monthly payments will be going towards an asset that could be sold in future years, adding security to your business. You also have a degree of flexibility and freedom as you can modify the property with minimal restrictions when compared to leasing.
Location does matter:
The location of your property does matter. If you are a medical professional in London and seeking medical property for sale or a medical office to rent, you may be looking to particular areas such as London’s well-known Harley Street; the medical hub of London. If there are no medical properties to rent in your designated area, buying or building your practice may be the most sensible course of action to secure an area where your patients reside.
Expanding and growing your business:
If you decide to own a medical property, expanding your business is simplistic when you can call the space your own. With no added pressures to ask permission from your landlord for added changes, it is easier to carve up added space. In contrast, if you were to lease, the cost of an additional medical office space may be prohibited or not available at all, depending on the size and practicality of the building itself.
At Savoy Stewart, we have a range of D1 medical properties on offer; both to buy and to lease as we understand that outgrowing your medical premises doesn’t need to become a financial crisis. If you do own a building or have taken on a lease and find that you have excess space to lease we can usually obtain a profit rents on spare space due to general lack of availability.
Get to grips with your numbers
Before committing to a property, it is worth making enquiries as to who the previous owners were and whether they were medical professionals. It is also worth contacting commercial property brokers who will be able to gather information as to the market rate for leased space and the costs per square foot for buying and building in your required area.
Medical office building space: Case Study:
The Centre for Reproductive and Genetic Health (CRGH) is one of our most successful clients who used our expertise to help them relocate their clinic from a wing of an old hospital to a brand new purpose built medical office space. Their requirements were to find a property space in the heart of London. Our property surveyors successfully identified a building opposite the Portland Hospital and after three months of negotiations, we were able to obtain planning permission for a new clinic at the same time as purchasing the freehold. The clinic relocated this summer following interior refurbishment.