Published date: 22 November 2019
Saving the NHS £160 million by acquiring a long leasehold and renegotiating unfavourable terms
NHS Property Services (NHSPS) held an under lease for 120 years, with 79 years remaining. The lease had various unfavourable terms including uncapped RPI rental uplifts, no break options and onerous service charge provisions.
In late 2014, the long lease in the site was to be placed on the market to investors. This presented an opportunity to NHS Property Services to buy out the intermediary interest and renegotiate terms.
Our Transactions and Portfolio Optimisation teams had less than four weeks to turn the bid around, working with BNP Paribas, KPMG and Hensons Solicitors to run due diligence, surveys and negotiations to ensure the site was a good investment before taking on responsibility. We then set about negotiating a reasonable purchase price and improved lease terms.
Read the full case study
In December 2014 we successfully acquired the head lease interest for £15 million, a one-off payment in return for a peppercorn rent, delivering cost savings of £160 million over the remaining life of the lease. We also negotiated significantly better terms on the lease, allowing the NHS to retain control of the site for the benefit of patients.
