17.04.18
Troubled Northamptonshire sells HQ for £64m to avoid ‘far more service cuts’
Northamptonshire County Council has accepted a sale and leaseback of its One Angel Square headquarters for £64m.
The council says that the sale and leaseback of the building will help to fund the transformation of services and governance in the county in partnership with district and borough councils.
Last year’s financial close depleted the council’s reserves, and the council says that new financial challenges have been added to its already very difficult budget position.
Last month the council announced that it was pausing the process of the sale and leaseback of its headquarters in light of the Best Value report. It was considered that time was needed to reflect and take further soundings prior to making a decision on the sale.
Having now done this, and following strong recommendations from the chief executive and chief finance officer on the financial impact of not proceeding, the council decided that it was right to go ahead with the sale.
The sale and leaseback agreement with Canada Life Investments will last for 35 years.
Cllr Matthew Golby, the newly appointed leader of Northamptonshire County Council, said: “We believe that this transaction is effective in leveraging the council’s assets and covenant allowing us to maximise the benefit of very competitive pricing at this point in the market.”
He is confident that the transaction will provide the funding that the council requires to enable its transformation programme, and argued that although it is “less usual” in the public sector, the leaseback arrangements would be seen as standard finance practice in the private sector.
“The advice received is that this deal represents very good value for money for taxpayers of the county and generates more money than the construction costs of the building,” Golby explained.
“Put bluntly without this sale far more service cuts would be required and the process of reorganising local governance in the county would be carried out against a backdrop of unsustainable cuts to the very services the new councils would be created to run.”
Ainsley Moore, PwC Real Estate advisory leader, added: “The council has taken advantage of strong market appetite to release capital at a very attractive rate in a very competitive process between a range of long term investors.”
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