MARK Raphael, CEO and founder of retail data analytical platform Lighthouse Insights, discusses the importance of planning and preparation around leasing.
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In COMMUNITY pharmacy, two elements can define your future profitability and value long before you dispense a single script: the security of your tenure and the rent you agree to pay.
Both can often be underestimated, yet they determine not only your viability but also your capacity to grow, reinvest, and plan with confidence.
Pharmacies are unique by way of their location regulations.
They can occupy high-traffic locations, usually near supermarkets or medical hubs, and their success is often tied to accessibility and visibility.
But that same location value can become threatened when the lease expiry clock starts ticking down and you are not prepared.
The complex location rules a pharmacy must abide by can make life very difficult.
Without early attention to lease expiry dates and renewal rights, a pharmacist can suddenly find themselves at the mercy of a landlord who sees an opportunity to drive up rent – or replace them.
The value of their business they have worked so hard for can evaporate before their eyes.
The first line of defence is security of tenure – ensuring you have pre-emptive alerts in place to notify you well in advance of any option to renew requirement or end of lease.
This allows adequate time to research and strategise.
In most cases, the desired outcome is to continue operating at the same premises, but the right steps need to first be in place for this to occur – it’s about negotiating from a position of confidence, not desperation.
Pharmacies with solid tenure not only safeguard their goodwill but also protect the continuity their patients depend on.
The second line of defence is market knowledge.
Too many pharmacists accept rent increases without challenging the “market review” because they lack access to the right data.
But market rent is not a mystical, voodoo concept shrouded in secrecy, and nor is it simply a mandatory percentage increase without justification.
Market rents are all about the right information, and having the right comparable data available can completely change the outcome.
Case in point: a pharmacy recently challenged a landlord’s proposed market rent of $141,200 per annum at lease renewal.
Using comparable lease data, they were able to provide the independent valuer with hard evidence of rents achieved in similar locations.
The result? The final rent was determined at $116,000, a saving of $25,200 per year, or $126,000 over the five-year term.
That’s not luck – that’s being prepared and armed with knowledge.
For every pharmacist, the lesson is clear: control what you can and be prepared.
Start early, know your lease terms, secure your renewal rights, and use reliable market data to ensure you’re paying a fair rent.
It’s not just good business practice – it’s essential protection for the health of your pharmacy.
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