British Gas has lost at least £5m by selling a 15.8ha (39 acres) development site at Birmingham Business Park back to Arlington Securities and AMP Asset Management.
The utility bought the site from Arlington, the park’s developer, in late 1991. It planned to build a 27,870 sq m (300,000 sq ft) headquarters where it would relocate 2,000 staff from London.
British Gas is thought to have paid at least £23m for the land, but Arlington is rumoured to have bought it back for closer to £17m.
To make matters worse, the company has also paid a £100,000 pa service charge on the site, bringing its total loss to well over £5.5m.
British Gas Properties’ Tony Sweeney said: “The decision to sell the site was taken after a rethink on our property holdings and related strategies. This is a superb site but it has no place in our current business development plans.”
Patrick Deigman, Arlington’s chief executive, said: “We have been searching for a site in the West Midlands for 18 months and are delighted that this timely opportunity to reacquire a very important site arose. Clearly, the transaction affirms the confidence of Arlington and our joint developers AMP in the park’s future.”
The deal will more than double the development potential at the south Birmingham park to around 120,770 sq m (1.3m sq ft). The total amount of undeveloped land at the park increases from 14.2ha (35 acres) to 30.3ha (75 acres).
Deigman added: “It also increases the size of our largest single plot from 3.6ha (nine acres) to 16.2ha (40 acres), which means we could accommodate a major occupier for up to 65,030 sq m (700,000 sq ft) of offices.”
Chesterton advised British Gas, while Grimley and Strutt & Parker acted for Arlington and AMP.
EGi News 15/01/97
