Funding / Real Estate
INVESTING Individual Investor Financial Adviser Institutional Investor FUNDING Entrepreneur Real Estate
Reading time: 3 mins

Case Study: The Lewisham Care Partnership

20 Sep 2017 By Octopus Real Estate

The Lewisham Care Partnership (TLCP) was established in June 2017 and sees five primary care practices coming together to serve 58,000 patients across the Borough. With a focus on future proofing patient care for residents in Blackheath, Brockley, Honor Oak, Ladywell, Lee, Lewisham Central, Rushey Green and St John’s, TLCP is set to provide a model for other primary care providers.

The challenge for primary care providers is to ensure that they can meet patient demand now and into the future. By working at scale, and with the support of our commercial partners, The Lewisham Care Partnership will be able to deliver health provision and GP services to the local population in a sustainable way.” – Colin Stears, Chief Officer, The Lewisham Care Partnership

The Challenge

Historically most primary care providers have owned their own premises, with new partners buying into the property and older partners releasing equity upon retirement. While property ownership has advantages, not least the historic rise in property value, it also comes with liabilities that are less attractive in today’s market.

Increasingly GPs are struggling to fulfil the needs of their patients because their premises are not fit-for-purpose. Their properties need updating or refurbishing, although in many cases investing in older premises is not economically viable as the costs will exceed any uplift in value.

Property ownership is also creating problems in recruiting new GP partners, as many younger GPs are not prepared to take on the associated financial burden and risks. Moreover, GP partners who wish to retire can find it difficult to release equity from their premises without forcing closure of the practice.

Morden Hill Surgery, which is part of TLCP, is such an example:

In recent years the senior partners at Morden Hill Surgery have recruited salaried GPs to the practice as partnership status has proven unattractive. We were also concerned about what would happen to the practice, with over 9,000 registered patients, when senior partners want to retire. As part of The Lewisham Care Partnership, the practice has benefited from TLCP’s relationships with commercial partners, and found a solution to its recruitment and property issues.” – Dr Charles Gostling, Partner, Morden Hill Surgery – Part of the Lewisham Care Partnership

The Solution

In a pilot scheme, GP Property (GPP) – a joint venture involving Octopus Healthcare, GPI and MedicX Fund – has been appointed as TLCP’s preferred property partner. GPP and TLCP will work together to develop modern, bespoke premises which will allow TLCP to improve the range and quality of services it offers to its patients.

As the first step in the scheme, GPP has purchased the Morden Hill Surgery from the partners and leased it back to the practice on a 10-year lease with rent equal to the GMS reimbursement. This has released the equity in the building for the Morden Hill partners, and they are now in a more favourable position to recruit new GPs to the practice as part of TLCP.

Alongside the sale and leaseback is a development agreement providing for GPP to work with TLCP towards eventual replacement of the Morden Hill Surgery with modern, fit-for-purpose premises. The current site has been identified as having a strong alternative use value, and the agreement between the Morden Hill partners and GPP includes sharing any future gains from its sale.

We believe that to ensure that primary care providers can meet patient expectations, deliver high quality healthcare services, and implement the GP Forward View, investment must be made in property. Morden Hill Surgery is an example of how partnerships with the private sector can deliver this provision.”- Colin Stears, Chief Officer – The Lewisham Care Partnership

This is the first project of the pilot scheme with the Lewisham Care Partnership facilitated by GPP – a joint venture involving Octopus Healthcare, GPI and MedicX Fund.

Related articles

PIC invests £200 million in the UK retirement villages joint ventures with Octopus Real Estate
12 Jul 2022

PIC invests £200 million in the UK retirement villages joint ventures with Octopus Real Estate

Pension Insurance Corporation plc (‘PIC’), a specialist insurer of defined benefit pension schemes, today announces it is making a £200m equity investment to fund the development and operation of around 10 new retirement communities across the country. The Fund, Senior Living Investment Partners, is a joint venture between PIC and leading specialist real estate lender and investor, Octopus Real Estate
Our new partnership with Homes England, Greener Homes Alliance
21 Oct 2021

Our new partnership with Homes England, Greener Homes Alliance

Octopus Real Estate have partnered with Homes England, the Government’s housing delivery agency, to create the Greener Homes Alliance. The new Alliance commits £175 million, providing both loan finance and expert support to SME housebuilders, enabling them to build more high quality, energy efficient homes throughout England.
Ground-breaking Ceremony at Brendoncare St Giles View
1 Jul 2021

Ground-breaking Ceremony at Brendoncare St Giles View

Benjamin Davis & Michael Toft from the Octopus team recently attended the ground-breaking ceremony to mark the new care home construction of Bredoncare St Giles View in Winchester. It has been custom designed by our healthcare development team for The Brendoncare Foundation who will lease and operate the new home.