Council Purchases ‘Strategic’ Town Centre Office Block

Published on: 17 Aug, 2016
Updated on: 17 Aug, 2016

Wey House in Farnham Road. The office block, a former base for Standard Life insurance, is surrounded by the gyratory.

Guildford Borough Council (GBC) has purchased the freehold of Wey House, a large office block in Farnham Road surrounded by the gyratory. It is currently occupied by law firm Stevens & Bolton.

GBC has not said how much the acquisition has cost or how it has been financed but it is believed that the deal would have been worth £20 million to £30 million.

Cllr Geoff Davis.

The lead councillor for asset management, Cllr Geoff Davis (Con, Holy Trinity), said: “Buying Wey House is a good investment and a strategic property asset for the council. It will also provide a healthy future income.”

Wey House is located within 200 metres of Guildford mainline railway station and adjacent to other council land holdings. The property is a freehold office building totalling 44,945 sq ft, arranged over ground and three upper floors.

The leader of the council, Paul Spooner (Con, Ash South & Tongham) said: “We are delighted with the purchase of Wey House. Not only does the site offer positive future investments for the council, it also provides an opportunity to consolidate our landownership in this area. This links in with our strategy to improve Guildford’s town centre.”

Wey House Entrance

A council press release stated: “The council aims to invest in property assets to support our strategic priorities. The assets acquired should increase our income, and stimulate and encourage business growth and sustainable development by investing in key sites for regeneration.”

Cllr Caroline Reeves (Lib Dem, Friary & St Nicolas) said: “This is a strategic town centre, riverside site to add to the council portfolio, a building that is a bit ‘marmite’ – you either love it or hate it. It had a high-quality refurb a few years ago, has an excellent tenant and will pay a much better return than interest from a bank.”

The chairman of the Guildford Vision Group and former director at property firm Savills, John Rigg, said: “Local authorities’ finance in the UK is looking tortuous. The government is cutting back on grants and authorities have to find new ways to generate revenue to maintain services.

“With the low cost of borrowing for local government, prime real estate can show record returns due to the positive leverage affect.

“Guildford may want to be bold in town centre redevelopment, in which case to own the main pieces of the town centre jigsaw can be a good thing. Wey House is quite important but is too recent to be redeveloped except with a sizeable write-off which makes it highly unlikely.

“I sense on balance it is quite possibly a good acquisition.”

Ken Woffenden, managing partner at Stevens & Bolton

Ken Woffenden, Managing partner at Stevens & Bolton LLP said: “We moved into Wey House in 2010 and this has proved a major step forward for our business. It is a landmark building right in the centre of town and this reinforces our long term commitment to being based in Guildford.

“We look forward to continuing our positive relationship with Guildford Borough Council as our new landlord of Wey House during the next 11 years of our lease.”

Responses to Council Purchases ‘Strategic’ Town Centre Office Block

Jules Cranwell Reply

August 17, 2016 at 3:57 pm

At a time when Guildford face real challenges, not least the discredited local plan, why is GBC spending our council taxes on property investment?

Why were we not consulted over such a significant dash into property development by the council? This is our money they are speculating with. Where was this reflected in the Tory manifesto?

If they have so much cash to flash, why are they not investing in real (council owned) affordable housing property? This would make a real difference to affordability, unlike the local plan, which does nothing for affordability.
Gordon Bridger Reply

August 17, 2016 at 6:45 pm

Until one knows what the council paid for the freehold, what leaseholds there are and what the estimated rate of return is, a judgement cannot be made.

Councillors could reasonably ask for this information and what is considered as a reasonable financial return on this investment. It could be a very good. This is a public asset and this information will no doubt be made available.
- Jules Cranwell Reply
  
  August 26, 2016 at 10:33 pm
  
  Can Cllr Davis provide the data that will allow us to see what we will get from this speculation and what it will do for us?
  
  Maybe next time we could be consulted?
Lisa Wright Reply

August 18, 2016 at 1:19 pm

How was this funded?

Was it a capital repayment or interest only loan and at what rate or was it a cash purchase.

Either way, the public should be made aware of what repercussions this investment will have on the tax payer’s pocket in the next 20 odd years.
Ben Paton Reply

August 26, 2016 at 11:32 am

Is this really a priority for public money? What exactly is the rental yield? Isn’t this just a property speculation – pure and simple with no ulterior public purpose?

Has GBC used access to cheap central government funds to ‘invest’ in this capital asset? If so, wouldn’t building some council houses to replace all those it has sold off have a higher total return?

And I thought that the job of the “opposition”, i.e. the Lib Dems, was to cast a critical eye on the Executive – not rubber stamp what it does.

How does investing in offices address the social housing shortage in Guildford? What’s the good of talking about social conscience if the council doesn’t put its money where its mouth is?
Mary Bedforth Reply

August 26, 2016 at 5:46 pm

I thought that we lived in a ‘democracy’. Why the secrecy?
Valerie Thompson Reply

August 26, 2016 at 5:59 pm

This is not the only office building GBC has bought. We have never been told where the extra money is coming from or whether they are good investments.

One would have thought that GBC needed to conserve every spare penny for the provision of affordable houses in the borough. But it seems they won’t be building any houses; they expect developers to do that for them.