Janice Carpi is National Underwriting Counsel for GRS Group
480.428.5585
[email protected]
It appears that the United Kingdom may soon be having a fire sale of some of their historical publicly-owned real estate. While the London Bridge doesn’t seem to be on the list, there are other landmark buildings that may soon be on the auction block.
A recent report, published by Parliament’s Public Accounts Committee, a committee tasked with ensuring that the taxpayer’s money is spent wisely, has criticized the government for holding onto empty offices and not selling them or making them available for rent. Due to the economic downturn, the government has been moving offices into buildings it owns, and vacating those that are leased. But it has been slow in selling off excess real estate because of the weakness of the real estate market.
The United Kingdom has approximately £60 billion of public assets in the central government office portfolio, about £20 billion of which is freehold property belonging to the government. According to a real-estate partner at Deloitte LLP, most of these assets are in Whitehall, the Central London area between Trafalgar Square and Westminster Abbey. While having a central London address may sound attractive to potential real estate purchasers, the problem is that many of these building are old, and would require extensive renovations to bring them up to the equivalent of a Class A office space. That fact that many of these buildings are old creates another problem: some are protected by regulations protecting historical buildings, which can crimp a developer’s plan to use the old buildings for other uses, such as hotels or residential use.
One building that is close to a sale is the Admiralty Arch, a large office property in the heart of London, seen below.
Admiralty Arch, London, UK
Rumor has it that the purchaser plans to convert the historic building into a hotel. Nearby, the Old War Office, which housed Winston Churchill and his staff during the WWII blitz of London, could be next on the block to go.
The sale of old public buildings is nothing new for English. Years ago, the old London Bridge was sold to an American developer, and it can now be seen at Lake Havasu, Arizona, see below. There appears to be no plans to sell any others bridges at the current time.
Old London Bridge, Lake Havasu, AZ