Kent county council is looking to outsource up to £4bn of property.
The property-rich local authority has appointed KPMG Corporate Finance to help formulate structures for a private-sector partnership, which could involve up to 4,000 properties.
The county council’s portfolio comprises more than 1,500 buildings.
However, the deal is expected to incorporate the property of Kent’s 12 district councils and other public sector bodies in the county, such as the MOD and voluntary agencies.
The aim is to make procurement more efficient and bring agencies operating in the same area under one roof.
The county and district councils recently teamed up on IT project Kent Connect.
The combined portfolio would total around 4,000 leasehold and freehold properties, with a heavy commercial weighting and numerous development opportunities.
Kent’s head of property strategy Duncan Blackie said the value of the estate could be as high as £4bn, but a proposed pilot deal in Thanet would probably involve £50m-£100m of assets.
He said the transfer of property would be incremental, adding: “I’m working on the assumption that we will have an equity share in the jv.”
Kent does not face the same financial necessity to outsource as Bradford council, which is expected to reach negotiation stage on its property outsourcing by the end of the month.
One industry source said: “Kent’s driver is strategic. It is responding to the government’s view that local authorities should not own and run property.
“It also has investment requirements. This is a way of raising money in order to fund a whole variety of government initiatives.
“Kent is ahead of a lot of other councils in terms of thinking about this.”
Government pressure on local authorities to release cash for frontline services is part of a massive efficiency drive, which parallels the Whitehall efficiency review led by Peter Gershon, head of the Office of Government Commerce.
Kent has conducted informal meetings with major industry players to assess market appetite for a contract, with Mapeley and Land Securities Trillium among those contacted.
Partnerships UK has also helped Kent develop a strategy.
The council will work up the business case for the deal over the next six months.
References: EGi News 16/02/04
