Spelthorne council is considering partnering with the private sector on future property deals.
The council, which has splashed out nearly £1bn in commercial property acquisitions in less than three years, is looking at how it funds and delivers its schemes going forward, said its deputy chief executive Terry Collier.
“We’re open-minded over our capital strategy service, in terms of how we fund in the future,” he said. “On some schemes we may go into joint ventures, which is one way that will help assist with funding. That is an option we would consider.”
His comments follow the council’s recent publication of its annual financial report, which showed that Spelthorne earned nearly as much from its property assets as it did from council tax income during 2018-19.
News the council is mulling JV deals comes after it attempted to buy up assets in central London on its own earlier this year.
The council, based in Staines, was tempted by Aberdeen Standard Investment’s 100 Cheapside, EC2, and Ballymore’s One Embassy Gardens in Vauxhall, SW8, but the sums did not add up, according to council leader Ian Harvey.
Speaking to EG about the council’s decision to walk away from the two deals, Harvey said: “Interest rates were becoming more volatile, plus the actual net margin that we work on is ultimately extremely slim.
“Both sellers were seeking a high purchase price against the yield which squeezed that even further, and in the case of Cheapside, when I became aware that in fact we weren’t buying a freehold and only a long leasehold was available, I got even more nervous.”
Deutsche Bank’s asset management arm, DWS, was in talks with Ballymore for One Embassy Gardens in January shortly after Spelthorne walked away from signing a deal.
However, it emerged earlier this week that these discussions had dissolved, following Ballymore’s decision to take the scheme off the market.
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