Background
Sydenham House in Essex was redeveloped by Harlow Health Centres Trust (HCCT), a local charity, in 2003 to house a GP surgery, a nursery and a 56-bed intermediate care home. We inherited the lease for the second and third floors that housed the care home in 2013 and originally subleased to Herts and West Essex Integrated Care Board (ICB) when it was still a Clinical Commissioning Group (CCG).
The challenge
Two of the three floors were specifically designed and redeveloped by HCCT to support intermediate care. The lease we inherited had several obligations and was significantly above the market rent, due to fixed inflationary rent increases. These factors negatively impacted the possibility of reletting the space due to financial viability for the future tenant. When the ground floor tenant moved out in 2023, this meant that the entire building was vacant incurring significant cost and concerns over future use, including from local MPs.
The solution
First, Sydenham House was reclassified as a vacant space disposal, and the Lease Advisory team began to work with the landlord to find a new tenant.
We proactively sought to market Sydenham House which resulted in interest from Essex Care Group. The Lease Advisory team saw a further opportunity to resolve the onerous lease issues at Sydenham House by assisting the landlord to offset any initial rental deficit, by securing a longer-term rental stream through a new tenant.
The Lease Advisory team negotiated an early surrender with HCCT so that the landlord could enter a new lease with Essex Care Group to deliver stroke recovery, complex care, and neurorehabilitation. The property needed modernisation to support the needs of Essex Care Group and upgrades to plant and machinery to comply with statutory requirements to support the delivery of long-term residential care in the local community. As part of the early surrender deal, we agreed to contribute to the cost of this additional work.
The impact
Due to the comprehensive service offer and expertise of NHSPS, we’ve supported Sydenham House in several ways:
- Proactively sourced a service provider and collaborated with the landlord to bring the building back into community use.
- Led the disposal of Sydenham House as an NHS asset.
The aim is for the property to be brought back into use in stages:
- Ground Floor: Initially, a specialised Stroke Recovery Unit will be established, providing high-quality rehabilitation services tailored to stroke recovery. This unit is set to open in June 2025.
- First and Second Floors: Over the next 18 months, Essex Care Group Limited will develop dedicated Discharge-to-Assess services and residential care, with a target opening in 2026.
Key NHSPS value-add areas
- Part of the NHS: This case study demonstrates our ability to navigate the system to reach a successful outcome that serves the interests of all parties involved.
- Value retained in the NHS: Through the work delivered by the Lease Advisory team, we have been able to save £1.9M for the NHS and secured a further investment of £755k to ensure that Sydenham House transitions into becoming a fully occupied building.
