Northamptonshire County Council make Â£11m profit on HQ after selling it to asset management firm
Northamptonshire County Council's One Angel Square headquarters have been sold to a UK asset management firm for Â£64m, Â£11m more than what it cost to build.
The premises, which cost Â£53m to construct, were bought by Canada Life Investments and will be leased back to the council.
Last month the authority revealed it was relying on the sale of the premises to fund transformation services which will, in turn, help the council save money and prop up its own finances.
Cllr Matthew Golby, leader of Northamptonshire County Council, said he believes the deal represented value for money.
“I am confident that the transaction will provide the funding required to enable the transformation programme to set the council on a strong future trajectory," he said.
“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.
“While this kind of deal may be less usual in the public sector the leaseback arrangements being entered would be seen as standard finance practice in the private sector.
“Put bluntly without this sale far more service cuts would be required and the process of re-organising 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.”
The council announced last month that it was pausing the process of the sale and leaseback of One Angel Square. 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 done this and following strong recommendations from the chief executive and chief finance officer on the financial impact of not proceeding it has been decided it is right to go ahead with the sale. The sale and leaseback agreement would be for 35 years.
Ainsley Moore of PwC, the real estate firm advising the council during the sale, said: “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.”
Michael White, Canada Life Investments property investment director, said: “The fund is very pleased to enter this transaction with the council. The long-term rental stream is an ideal match for income annuity liabilities. It is another good example of private and public sectors working together in mutual benefit.”