Spelthorne Borough Council is on the verge of purchasing 100 Cheapside in the City of London for a figure around £140 million.
Standard Life Aberdeen began looking for buyers last year and brought on HFF to sell the building for £136 million. The 100,000 square foot office building is home to law firm Goodwin Proctor’s London headquarters, as well as Ashtead, the construction group.
This investment along with another proposed purchase – a £160 million office development in Nine Elms, Battersea – would take Spelthorne Borough Council’s commercial property portfolio past the £1 billion mark. Having already spent £890 million on commercial property in the previous two years, the purchase of 100 Cheapside would be their first in the City of London, a highly competitive area.
Some of the council’s other purchases include £360 million on BP’s office complex in Surrey, £285 million on the Landid/Brockton Thames Valley portfolio and £170 million on 12 Hammersmith Grove, a West London office building home to serviced and coworking offices.
The council’s seemingly bullish strategy has been criticised as “bonkers” by some in the industry but the council was quick to point out that they “only take on property investments that stand up to the closest scrutiny, the most thorough due diligence and the most expert analysis”.
The council’s investments are part of a plan to “mitigate the withdrawal of government funding” for local authorities. Spelthorne funds their investments through access to the Public Works Loans Board, where councils can borrow money at low interest. One agent, however, pointed out that others councils were acting more prudently with their investments.