Budget 2017 committed the Government to the highest ever spending on the health sector. Improved healthcare services and facilities are back at the top of the Government's and the electorate's agenda. As part of that renewed focus and as outlined in the current Programme for Government, we expect to see a significant increase in the number of primary care centres being developed throughout the country.
Primary care comprises all of the health or social care services that you find in the community, outside of a hospital campus.
There are 92 centres currently in operation in Ireland. Of these, 45 were developed directly by the HSE and 47 were privately developed with approximately 19 million in annual rent being paid by the HSE.
In May 2016, an agreement was reached with the European Investment Bank for a 70 million loan to develop 14 centres throughout Ireland. The project is a Government-based public-private partnership scheme and will be delivered by a consortium comprised of Prime, Balfour Beatty and its investors Prime UK Holdings Limited and HICL Infrastructure Company Limited. All 14 sites have secured full planning permission.
Key factors for development
Two of the fundamental steps for developers are to secure a suitable centre location with planning permission that meets HSE requirements and to bring in the required number of local GPs as tenants. Access to funding is also vital to get projects up and running. According to a recent Bank of Ireland review of the sector, construction of these centres requires an average development finance loan of approximately between 3.5 million and 7 million.
The legal framework is often structured on the basis of an operational lease granted to the HSE by the developer of the centre. Some of the typical commercial terms for the lease arrangements with the HSE are as follows:
The developer will lease the relevant areas of the centre to the HSE. The HSE typically requires 800...