Peterborough City Council confirms purchase of Sand Martin House for £47 million
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Peterborough City Council has now acquired the freehold of its offices at Sand Martin House in Fletton Quays.
The purchase price of £47.378 million has been confirmed by its adviser Carter Jonas. The price represents a net initial yield of 4.75 percent, according to agents Knight Frank.
In May, the city council confirmed its intention to take out a £50 million- which was later passed by full council- loan to fund the acquisition after being informed Legal & General Assurance (Pensions Management) Limited intended to sell the building.
As part of the lease agreement the council signed it 2018, it was given first refusal to purchase the freehold should the building be placed on the open market.
The sale includes the 90,017 sq ft building, its 5.9-acre site- including the office and retail units and both the surface level and multi-storey car park.
The council occupies the building, having secured a 25-year lease for the space in 2018, with rent reviewed to RPI every five years.
It was used to host full council meetings during the pandemic due its size.
The council also sub-lets office space to the Construction Industry Training Board. The sub-lease was signed in 2019 and nets the authority around £700,000 a year with break options after three and six years.
Legal & General purchased the site in October 2016 for £5,500,500 plus VAT of £1,100,000.
A spokesperson for Peterborough City Council, commented: "Following approval by Full Council last month, we have now completed the purchase of Sand Martin House."Detailed financial modelling showed that the cost to borrow the money to purchase the building was less than the rental costs for the next 20 years and will additionally provide a saving for taxpayers in the next five years.
"Purchasing the building also gives us full control of its use.”
Ali Rana, Head of National Investment, Commercial, Carter Jonas, added: “This acquisition represents a positive investment for the council and the people it serves.
“The purchase will ensure that the council, which is committed to having its headquarters in the centre of Peterborough, remains in the heart of the city, close to its residents and businesses, whilst having greater control and management over the cost of its accommodation.”