Many shopping centre landlords see turnover as the key measure for setting pharmacy rents. While considered illegal and not in accordance with the relevant pharmacy legislation, many landlords have continued to seek turnover data from pharmacy (and other tenants) with a view to escalating rent when turnover increases.
As a result of the recent April 1 PBS Reform price reductions, many pharmacies witnessed a decline in turnover in 2012. But will landlords now reduce rent?
Medici Capital has just completed its 2012 Pharmacy Rents analysis based on the data for the year ended June 30, 2011.
The key findings of the report are as follows:
Median pharmacy occupancy costs (rent and outgoings) are $500 per square metre;
Median rent % of turnover is 3.33%; and
Any negotiations should not rely on averages as they skew the discussions due to a few abnormal sites (sample includes pharmacies paying more than $3,500 per square metre).
This information presents a summary of the results of our recent analysis. For your copy of the results of the research or a simple assessment of rent contact Medici Capital on 03 9853 7933.
Frank Sirianni can be contacted at Medici Capital, Level 10, 52 Collins Street, Melbourne VIC 3000. Medici Capital, industry leaders in pharmacy valuation, finance & management consulting. Helping pharmacists achieve their goals. www.medici.com.au
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Did you know that August 2012 marked 5 years since the GFC began? And 5 years on - the stock market continues to display volatile returns while financial markets continue to be overly cautious. While pharmacy has been relatively resilient, it is important that pharmacists understand the impacts the GFC have had on the industry.
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As a first time buyer, buying a business can be a daunting task. However, it is important to remember, that buying a business is a structured process - there are steps to finding a business, steps to settling a business and key parties who can assist you in the process. The key is to understand the process and assemble a team BEFORE looking to buy a business to ensure that you get the best outcome possible. When you find a business you would like to buy, it is important that you know how to determine your offer and that you are ready to proceed with the purchase.
