Spelthorne Council, who are going on a property buying spree are about to purchase 100 Cheapside, a business district within the City of London. It is thought that their purchase fee is somewhere in the region of £140 million.
The building, located ideally in the City district of London, is a 100,000 square foot office building. It is currently home to several well-known businesses including Goodwin Proctor and Ashted Construction.
Last year Standard Life Aberdeen started to look for buyers and bought on HFF, which resulted in them getting £136 million for the sale of the building.
What Are Spelthorne Council Buying?
Spelthorne Borough Council already has a pretty impressive commercial property portfolio. It is thought that they want to snap up Nine Elms, a set of offices in Battersea. It is thought alongside the 100 Cheapside purchase, this will bring their current property portfolio over the £1billion mark. They already have numerous big-name properties however 100 Cheapside will be in their first central London purchase.
Other places that they own are the Surrey Head Quarters for BP (bought for £360 million), 12 Hammersmith Grove in West London (a coworking, serviced office space bought for £170 million) and several Brockton Thames Valley properties (bought for £285 million).
What Does The Industry Think?
Many industry related people think that the council’s approach to buying properties in this way is not sensible; however, they have defended themselves by reassuring people that they are committed to buying commercial property that they have fully research and that has gone under full scrutiny to ensure it is something that will work.
In order to raise funds to make the purchases, they have accessed loans via the Public Works Loans Board which has allowed them to borrow at a very low rate of interest. Most of their commercial property purchases are outside of their direct area but tend to be nearby with commercial property in Reading, Slough and London.