Sale of Lloyds community pharmacies - what does this mean for healthcare landlords?
Recent news is reporting the successful sale of all community pharmacies once owned by Lloyds Pharmacy Limited.
Lloyds Pharmacy Limited have reportedly sold all of their high street and community pharmacies. Lloyds Pharmacy have previously operated a number of pharmacies situated within GP Premises and therefore a number of GPs are landlord to leases which are tenanted by Lloyds Pharmacy. In connection with this sale, the company Lloyds Pharmacy Limited have changed their registered company name to 'Diamond DCO Two Limited'.
As a result of these pharmacy sales VWV have seen a large amount of pharmacy tenants approaching our GP clients (as pharmacy landlords) to assign their pharmacy lease.
What this means for pharmacy landlords
If you are a landlord of pharmacy premises, you may be impacted by the increasing number of pharmacy closures. It is important to be aware of what this might mean for you. We recommend reviewing your lease agreements so that you are prepared for how your tenant may request to end or assign their lease.
If you are a landlord of a lease under which Lloyds Pharmacy Limited is the current tenant, your tenant is now known as 'Diamond DCO Two Limited'. This does not represent a change in the entity who is the tenant under the lease, just a change in their name.
What to do if you receive application to assign
A landlord may also receive an application from their existing tenant to assign the lease. This means that the existing tenant is asking to transfer their rights and obligations under the lease to another party.
Although your lease may have been granted to Lloyds Pharmacy Limited, an application to assign that lease may now be received from 'Diamond DCO Two Limited'. It is important to recognise that this is an application from your tenant to assign their interest in the lease.
Most pharmacy leases provide that a tenant cannot assign their interest in the lease to a third party without the prior consent of their landlord - although this consent usually cannot be unreasonably withheld or delayed.
It is very important to seek legal advice if an application to assign a lease is received. Failure to act quickly could allow the tenant to argue that you have unreasonably delayed consent, and they may be able to proceed with the assignment on that basis, without further reference to you. We have previously published an article on lease assignment, if you require more information on this topic.