Council plots to be auctioned off

2:40pm Thursday 4th December 2008

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SWINDON Council hopes to raise £2m from eight properties that will go under the hammer next week.

All eight buildings in the Delta Business Park will be sold as freehold ground rent investments.

The sales are part of a package of measures to fund the council’s £380m capital programme which includes school buildings, the Central Library and other schemes.

During a period where sales of land for house building has slackened off, freeholds are a more attractive way for the council to raise funds.

But the council lead member for finance admitted that the list of freehold properties held by the council is rapidly running out.

Coun Nick Martin, cabinet member for resources, said: “This is part of a series of freehold packages but I think this is pretty much the last one.

“When we sell off freehold ground rents we make sure we put aside a part of that money to offset the loss in income through rents.”

Coun Martin admitted that finding funding through selling off council assets was becoming increasingly difficult.

He said: “The problem is that if we are planning to build a school, for example, we would look to raise funds for that through selling off land for housing – but at the moment no one is coming forward to buy that land.

“The wheels have come off this year and Gordon Brown’s not going to be able to put them back on for at least a year, so it is a worrying situation.”

The properties comprise mainly office buildings, along with a 122-bedroom hotel.

A spokeswoman for the auctioneers, Colliers CRE, said: “The public sector is feeling the pinch as there is not much cash coming in from central Government.

“Councils tend to rely on sales of house building land for their main capital receipts – i.e. old schools and depots, however there is currently no market for land, so they have to delve deeper into their property portfolios.

“The situation has not been helped by the massive potential losses of reserves held with Icelandic Banks.”

The auction will take place at the Radisson SAS Portman Hotel in Portman Square, London, next Wednesday from 11am. Further information, including copies of the brochure pages and detailed descriptions, can be downloaded from www.collierscre.co.uk/auctions.