Technology in Pharmacy Business with Scott Carpenter

Leveraging Time with Lease1 Technology

July 15, 2022

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In this episode of the Pharmacy View Podcast host Scott Carpenter, EVBC is joined by Phillip Chapman, Director/Founder at Lease1, Australia’s leading Retail Shop Lease specialist, providing a unique tenant-only representation service to ensure retailers achieve the best commercial outcomes on their leases. Listen in to the episode to learn more about how the lease1 is a living document that can be leveraged by a resilient industry like the Pharmacy to ensure there is a level playing field between landlords and tenants.

Phil shares how he has spent around three decades in the industry and is well aware of the challenges and frustrations that business owners face. Having had that understanding and experience makes him uniquely suited to be behind Lease1 given that the platform is a one-stop-shop to resolve the issues between Pharmacy Owners and landlords. He then talks of his association with the Pharmacy Guild and of being endorsed by Gold Cross for 12 plus years and how he has been working with shop leases for Pharmacists for 25 years.

Lease 1, delivers tailored solutions and value to retail tenants when it comes to lowering costs, making terms more favourable for tenants, and helping them plan strategically. Phil shares how the company uses Best Alternative to Negotiated Agreement (BATNA) to give clients more control over the process and says that their services include (but are not limited to):

tenant consultancy services
lease information and research
site sourcing and selection
dispute resolution
retail franchising
portfolio administration

When asked about how COVID impacted their business, he shares how they had, unaware of the global pandemic, moved out of their physical office space in September 2019 and were in fact geared up and ready to serve the customers when the restrictions were imposed. When COVID hit, the company was ready to provide a heap of support to Pharmacy members—over 600 phone calls, 32 odd sessions and webinars in relationship support were made available during that period. Phil says staying ahead of the technology curve was at the core of being able to give the service that they provide and fund it.

What Phil finds as being the major challenges are CPI and inflation rates. Increasing CPI is what landlords directly depend on for increasing rents. His advice is for tenants to not wait until the end of the lease period and to leverage the resilience shown by Pharmacies during crisis and bring that to the negotiation table when renewing lease contracts. He adds that having alternatives when going to these renewal meetings can change the game for tenants. Lease1 empowers the tenants with information that can help them do just that. In doing so, they will save millions annually. Phil says this on the back of having actually saved millions for his clients because waiving even one rent review on a lease saves thousands. Letting the lease agreement sit on the bottom drawer is a lost opportunity and adds that using that opportunity to extract value when negotiating is vital for any Pharmacy.

Topics Covered

Creating a level playing field between landlords and tenants
Ability to morph the business during COVID
Consumer Price Index (CPI) as a challenge
Leveraging the resilience of the Pharmaceutical Industry
Challenges with lease renewal
Tremendous increase in value of leasing out to Pharmacies

Features and services that Lease1 provides
Use of technology in the business

Key Quotes (Time Stamps)

“Most of your Pharmacy audience will know Lease1. We’ve been associated with the Pharmacy Guild and endorsed by Gold Cross for 12 plus years now but we’ve been dealing with the specific area of retail shop leases for Pharmacists for 25 years. And we’ve been delivering savings to not just Pharmacists but other retailers as well.” (1:12 – 1:28)

“We are also heavily invested with the Pharmacy Guild in relation to the rental reports, the sales reporting guidelines, changes to legislation and reforms to try and level the playing field between landlords and tenants.” (1:33 – 1:45)

“We actually, over the last five years, have been transforming our business to make it mobile and anywhere, any-day, any-time-of-the-day business. And we actually closed or moved out of our physical office space in September 2019. So, we did not anticipate COVID, but we were geared up and ready for it.” (2:26 – 2:41)

“CPI is a direct reflection and an index used for increasing rents by landlords and we’re really concerned.” (4:24 – 4:31)

“Landlords are effectively leaning in on those businesses that were resilient and Pharmacy goes to the top of the class.” (5:40 – 5:46)

“Renewing the lease early is going to give you the best outcome rather than waiting because the landlords are rubbing their hands together, they’ve got their spreadsheets out and they are looking across CPI, the inflation rates and saying, ‘We want a big slice of that pie; and we know we can lean into Pharmacies because they were resilient.’ They can’t lean into gyms and hair-dressers and massage because they are not resilient.” (7:32 – 7:55)

‘The opportunity to extract that value out of that lease is vital. It’s compounding as well. Just waiving one rent review in a lease term, we’ve proven it time and time again, will save tens of thousands of dollars in most cases. And that’s money that a Pharmacist desperately needs.” (14:19 – 14:32)

“Lease is like a marriage certificate—just happens to have the divorce already packaged in. Now, we know who gets the dog, the house, and the car. So, we need to get that document critically as a living document; manage that critical path or that timeline so that we get the best value out of it.” (14:57 – 15:11)

“We realized a long time ago that to give the service we provide and to be able to fund that, we had to stay in front of the technology curve.” (17:08 – 17:14)

Social Media Clips (Time Stamps)