Specialist business property adviser group Christie & Co has predicted a continued rise in the number pharmacies coming to market in England this year.
It says the impacts of the £50 million Category M clawback, drug supply shortages and resultant pricing issues made for a more challenging year for the pharmacy sector in 2019.
Its latest annual report, titled ‘Business Outlook 2020’, outlines Christie & Co’s market predictions: “In England we expect to see corporate and multiple operators continue to churn non-performing/marginal pharmacies, with many being acquired by independent contractors.”
While managed business sales are expected to increase further in 2020, the report predicts “further retirement sales” from pharmacy owners “who don’t adapt to the new funding regime and service-led contract.”
It also predicts an increase in the number of sales to first-time buyers.
Tony Evans, Head of Pharmacy at Christie & Co, said, “Whilst 2019 was a challenging year for pharmacy contractors, appetite remained strong from opportunistic purchasers who were able to take advantage of the increased volume of pharmacies that came to market.
“Many of the larger multiples and corporate operators churned non-core pharmacies within their estates and chose to concentrate/invest in their existing estates rather than new acquisitions. This is a trend that we anticipate will continue throughout 2020.”
The report notes that the new five-year national contract for pharmacies in England may bring some certainty to the sector.
“The deal fixed the global funding sum at £2.592 billion per annum for each of the next five years and in doing so, signposted changes in the allocation of funding to more service-led activities. However, the full impact is difficult to measure and will be dependent on the roll out of new services over the course of the deal.”
However, according to the report, the funding climate in Scotland will be “far more settled.”