First-time buyers made up 45% of pharmacy sales brokered by business property advisor Christie & Co in the last year, it has revealed in its latest annual report.
And 55% of pharmacies were sold to independent contractors and regional multiple operators, Christie & Co said.
The rise in first-time buyers is almost double the number of sales to first-time pharmacy owners brokered by Christie & Co last year – when this group made up just 23% of the broker’s sales, despite being 80% of those expressing an interest in acquiring a pharmacy business in 2022.
In addition, the broker also predicted that the trend of ‘distressed’ businesses being sold to local buyers keen to acquire competitively priced opportunities would continue throughout 2024.
It said that in 2022, just 3% of property sales had some form of distress, but by the end of 2023, properties with distress made up 10% of sales.
Darren Bond, global managing director of Christie & Co, noted in the report that higher inflation costs had impacted wage and overheads for businesses across all the sectors the broker works with over the last year.
And while he said that to date, ‘much of this has been offset by price increases, which have been largely absorbed by the consumer’, the broker predicted that this would not continue for much longer ‘before consumers vote with their feet’.
The broker also noted the number of large corporate operators offloading multiple sites within the last year, making packages of between 25 to 100+ properties available for sale.
In March, the broker facilitated the sale of 33 pharmacies in the North of England to the newly formed Hub Rx, which is developing centralised automated dispensing for independent pharmacies.
In April and May, independent group Jardines UK bought several pharmacies that were formerly LloydsPharmacy branches across Hertfordshire.
And 36 former LloydsPharmacy branches across the country were bought by Jhoots Pharmacy Group in September.
Overall, Christie & Co reported a ‘general softening of sale prices’, with its price index reporting a drop of 4.6% across the year.
Meanwhile, there were also several increases in the base rate, rising to 5.25% in August 2023. This led to an increase in the annual cost of repaying a pharmacy loan and ‘inevitably impacted debt servicing’, the broker noted.
Christie & Co suggested that 2024 would be ‘a big year for pharmacy’.
Ahead of changes in the sector such as the introduction of Pharmacy First in England and expected changes to hub and spoke legislation, 50% of funding supported by Christie & Co was used for automation, equipment and refurbishment.
The broker said that in its survey of pharmacy professionals, 46% had said that they felt positive about 2024, while 55% felt either neutral or negative about the year ahead.
And 85% said that they were planning to either buy or sell a pharmacy this year.
Tony Evans, head of pharmacy at Christie & Co, commented that extra funding for new services in 2024 ‘will no doubt provide much-needed additional income in offering some respite to contractors’ in England.
But he added that ‘the key driver to the future viability of the sector’ will be the successful negotiation of a new contract for community pharmacy.
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