The Driver and Vehicle Licensing Agency has revealed plans to outsource its entire property portolio.
It wants to cash in on over 1m sq ft of accommodation, 700,000 sq ft of which is in the Swansea area. A deal could lead to the redevelopment of its freehold 500,000 sq ft Morriston HQ and residential development on surplus land at the 23-acre site on the outskirts of Swansea.
The Treasury-DVLA initiative to bring in a private-sector partner will allow the DVLA to continue its expansion programme while cutting down on the body’s operational costs.
The agency is “seeking an innovative partner or partners to obtain value for money from the accommodation it needs”. Prequalification questionnaires must be returned by next month.
The full structure for the deal has not been defined but the DVLA is expected to offer a number of freeholds and development opportunities to the preferred bidder. The 30-year contract would also include management of buildings, refurbishment and facilities management.
Outsourcing specialist Land Securities Trillium is among those planning to pitch. Head of new business Mark Norris said: “From our perspective, this is a size that is of interest.”
The DVLA has identified two new buildings now under development in Swansea Vale that it would expect to sell and lease back as part of the deal.
It estimates the net present value of the project at £150m, and one market source suggested that this would equate to £10m-£15m in annual payments to a property partner.
The outsourcing contract will also cover 40 local offices on the UK mainland, totalling around 250,000 sq ft, and a total office estate of around 60,000 sq ft in Northern Ireland.
