Thinking of a move to the high street?

Location, location, location is not only an important mantra for finding one’s home, it is equally, if not more important, for any independent doctor looking to open a surgery or clinic. 

While many private practitioners have traditionally operated from converted houses or office spaces, there is a growing trend towards moving into the high street. 

Commercial law experts Bryn Morgan and Robert McCartney explain the key considerations for practitioners thinking of opening a practice in a high street unit.

Our commercial real estate team has seen an increase in inquiries over recent months from practitioners looking to either move their practice from an existing property or open a new one in a commercial space. 

This shift is driven both by the increase in availability of competitively priced units since 2020, when the pandemic forced businesses to close, and the improved accessibility and modern clinical aesthetics that these units provide.

There are several factors and potential challenges to consider when finding a suitable location for your practice and it is important to seek independent advice from legal advisers, architects and surveyors when considering your options. 

When working with our clients, we advise that they consider the following factors to make sure their relocation or expansion runs smoothly:

Agreeing lease terms

While you may be able to consider purchasing premises for your use, most start-up businesses will be looking to lease space. 

It is sensible to engage a specialist valuation surveyor to help you identify options and negotiate terms with prospective landlords. 

You will need to consider various premises expenses including rent, service charges, business rates and utilities. And you will need to be comfortable with the length of the lease, which may be a sizeable commitment. 

Even if you intend to trade through a limited company as the tenant, it is not unusual for the landlord to require personal guarantees and/or a rent deposit.

Planning permission

For planning purposes, clinical services fall under Use Class E, which also includes retail units, restaurants and nurseries. This means many retail units will no longer need planning permission to change their use to medical.

That said, it is important to check existing planning permissions for conditions that restrict changes of use or other operational matters such as opening hours.

If planning permission is required, an application to the local council will be needed, which can take several months. 

There may be local planning objectives and requirements which could hinder the application and it is important to engage with the local planning team to understand this. 

Further complications can arise if the unit is listed, which is sensible to check at an early stage.

Facilities and building regulations

Once the unit is identified, you must consider the fit-out of the premises. Retail units are often provided as empty shells, which allows you to design the ideal solution. 

However, sometimes they have existing infrastructure which may need to be removed or altered to meet your requirements. Often you will be able to negotiate a rent-free period to give you a window of time to complete the fit-out before commencing trade.

The fit-out may include significant work to convert the premises to clinical space with consulting rooms and a reception area. 

It is particularly important to ensure that the premises meet the appropriate healthcare standards and are compliant with Care Quality Commission rules – for instance, in respect of sound- proofing and infection control.

The greater the level of complexity or specialty of the service provided, the more important it becomes to ensure these standards are met.

You will need to ensure that the works comply with building regulations. You are likely to need permission from the landlord, which would usually be governed by a licence for alterations that would need to be agreed as part of your lease negotiations. 

Contracts with builders should also be reviewed carefully.

Repair and re-instatement obligations

Leases of retail units will usually include repair obligations. As a tenant, you may be responsible for the whole building if the unit is stand-alone or you may be responsible for structural and external repairs via a service charge. 

It is important to understand and, where possible, limit these obligations and to schedule maintenance works and budget appropriate fees.

Leases often require the premises to be re-instated to their previous condition at the end of the term. This could be a significant cost and requirement that needs to be factored into the planning stage. 

It is particularly important if you have growth plans and anticipate moving the service in a relatively short period of time. It may be possible to negotiate variations, but it must be discussed early in the process. 

Accessibility

This can be easily overlooked, but it is important to identify whether there are any restrictions which may prevent access to the site. 

It is common for retail areas to have fixed open and closing times or for local parking facilities to be closed at certain times. Opening times may also be restricted by the existing planning permission. 

This is particularly important if the unit is inside a large retail centre and may not be something the landlord can vary if they are subject to restrictions. 

Additional costs such as security and maintenance fees could be affected by this issue.

All these factors are likely to impact on the proposed budget for the business and they will certainly impact on the time-frame for implementing the change.

First published in the June edition of Independent Practitioner Today.

If you are looking at opening a service in a retail unit or any other innovative location, please contact Hempsons to discuss this further.