Land Promotion and Development

The NHS Five Year Forward View and the Naylor Report signal significant changes to the NHS estate, specifically to release land from the NHS which is no longer required both to deliver health and care services. It is clear this surplus land could help meet the Government’s housing delivery targets and contribute to meeting the NHS deficit. For example, a landmark devolution deal for London Trusts has received approval in 2017 that will incentivise London Trusts to sell unused land and buildings for the development of more housing. Money raised from the sale of land and buildings will be reinvested in health and care, community and public services.

There are a range of mechanisms in place to support NHS Trusts in releasing assets and to develop a more joined up approach with local councils and other care providers that will ultimately improve the provision of health and care services. Mechanisms include the Sustainable Transformation Programmes (STPs) for the NHS and One Public Estate which are generally led by Local Authorities. These initiatives benefit Trusts by:

• Optimising Asset Base
• Co-location with other public organisations
• Reducing occupancy and running costs
• Creating more flexible multifunctional bases
• Maximising the return to the local community

Ryhurst’s Strategic Estate Partnerships help NHS Trusts to maximise the value of their assets, including identifying the options available to a Trust where it seeks to dispose of land or buildings no longer required for health provision, as well as the opportunities that might be available to generate increased revenue from assets through development.

Ryhurst provides support by increasing NHS returns on surplus assets by using a variety of tools, alongside a robust and structured approach that includes:

Ryhurst uses market knowledge and experience, carries out soft market testing exercises with local and national developers to gain insight into the best route to market and through gaining planning permission for a particular site. 

Options might include:

• Land promotion for residential development; ensuring the right mix of private residential, shared ownership and affordable homes often working with the HCA, developers and housing partners.
• Grant of option agreement; allowing early release of land value to a Trust, the Trust can grant an option or contract for the future promotion and disposal of the land by a JV or a private sector partner, with the Trust receiving financial upside on the eventual disposal.
• Disposal on the open market; we have considerable experience of marketing sites for disposal by Trusts to market developers or buyers. We have achieved 50% uplift in sales receipts compared with initial offers in some instances.
• Leasing land for commercial development; we agree terms for Trusts for the disposal of long-leasehold interests in land to commercial hotel and retail operators, providing bullet payments and/or long term income to Trusts.
• Release of land for alternative public sector use; we agree heads of terms for Trusts with various public sector groups, for example education bodies in the sale of land for school development, enhancing the return to the Trust by 20% over initial offers.
• Use of land for complementary services; we introduce Trusts to alternative complementary use of land for clinical or service provision through NHS, third sector or independent agreements, including Extra Care facilities, Step-down and rehabilitation or complementary therapies.

Ryhurst has identified options delivering returns ranging from a single initial offer from an interested party to over four times that amount through a development option. This example is illustrative of the significant difference in return that can be achieved through the proactive marketing and selling of surplus land.