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Property broker Hutchings has seen a “modest downward trend” in average goodwill values achieved by pharmacies in 2025, it says in its review of the year. 

Published last week, the Hutchings 2025 market report for England reveals that goodwill sale prices this year have ranged between £0.34 and £1.05 per £1 of turnover, giving a combined average of £0.76 – down from an average of £0.80 in 2024 and £0.88 in 2023.  

However, buyer demand has held up in larger towns and urban centres “where competition is most intense,” with pharmacies in London and the South East achieving an average of £0.86 per £1 of turnover. 

This was followed by the West and East Midlands where the average was £0.70 “with other regions trailing only marginally behind,” said Hutchings. 

The downwards trend is due in part to “ongoing concerns surrounding business profitability” making buyers more cautious, the report said.  

Gross profit margins are also being squeezed by funding constraints, said Hutchings, tumbling from 34.4 per cent in 2023 to 31.5 per cent in the year to date. Again, pharmacies in London (35.9 per cent) and the South East (31.9 per cent) outperformed the market as a whole. 

The average EBIDTA multiple achieved at completion has risen from 8.54x in 2024 to 9.54x in the year to date due to “increased competition among buyers,” the report added. 

“While dispensing item numbers continue to be the key measure of value, buyers are placing increasing importance on the potential for future growth through NHS and private service delivery,” said Hutchings, adding that market sentiment is “increasingly positive” since a new contractual settlement was announced at the end of March. 

The broker described 2025 as a period of “significant change” with market activity “shifting notably as seller instructions rose by 91 per cent compared to the previous year,” driven to a large extent by corporate chains shrinking their estates and selling “non-core or underperforming branches”. 

Hutchings said: “Corporate and multiple operators account for 71.3 per cent of all sales instructions year to date, a clear reversal of the 2024 landscape when independent sellers held a comparable majority share.

“At present, independent pharmacy owners represent 19.2 per cent of instructions, while groups focused on divesting outlier branches comprise the remaining 9.5 per cent.” 

David Brewer of specialist pharmacy finance brokers FT Finance said: “The lending banks continue to view pharmacy as a ‘green light’ sector, buoyed by the Government’s emphasis on promoting direct access to pharmacies as the first port of call for patients, alongside an increase in remuneration opportunities from enhanced service delivery.

“Competition between lenders has also intensified, with new entrants to the market driving down the overall cost of borrowing and reducing cash contribution for purchases.

“In many cases, buyers now only need to contribute 20 per cent towards goodwill, with banks lending up to 80 per cent. Where the pharmacy premises are freehold, 100 per cent finance is often achievable on that element. 

“For first-time buyers, the outlook is particularly encouraging. Loan margins have fallen to between 1.49 per cent and 2.25 per cent (subject to circumstances and loan structure), improving affordability assessments and the overall viability of pharmacies under active owner management.” 

Hutchings predicted that the outlook for 2026 will be one of “cautious stability,” with average goodwill values “expected to remain broadly steady” and corporate chains expected to carry on downsizing their estates.