The South West Regional Development Agency has bucked the trend in the government’s fire sale of RDA assets. While local authorities across England are faced with buying strategic assets on the open market, SWRDA is transferring bundles to three councils to ensure major regeneration and economic development schemes are kept in the public sector.
SWRDA has 58 land and property assets up for disposal, including all its offices, at a market value of £40m. About 70% are on the open market or are being offered to existing tenants and developers to buy. The rest have been packaged into bundles and will be transferred to Plymouth, Gloucester and Cornwall councils, the Homes and Communities Agency and the Department for Business, Innovation and Skills.
SWRDA is understood to be the only RDA in the country to get the green light from BIS to transfer major assets to councils, with the department rejecting other RDA bids to have deferred payment schemes or to reassign assets directly. Included in the bundles are major regeneration schemes such as King William Yard and the Plymouth International Medical and Technology Park (see panel).
SWRDA has packaged the bundles in such a way that the liabilities on the land and property outweigh the value of the assets on the open market and in most cases they will be cashless transfers. Ian Thompson, SWRDA area director, says the RDA is simply following what it has been doing for the past 10 years and much of the land transferred has been on sites where parts are owned by the local authority and parts by the RDA.
Strategic importance
“It made sense to join them up so councils could keep a hold of regeneration,” says Thompson. The sites have been transferred because they have significant strategic importance to economic development and regeneration and are far from being ready for the open market. Thompson says they need finishing off and would benefit from more time in the public sector for remedial work, infrastructure and site servicing.
There have been some grumblings among businesses about the transfers, which represent major assets in the region. But, as Thompson says, it gives the councils an opportunity to follow in the RDA’s footsteps.
GVA director Mark Brunsdon agrees, saying that releasing land that has yet to be masterplanned to the private sector would not be the best use of SWRDA’s assets. “Some of these sites still need public sector guidance to ensure the quality of the original proposals,” he adds. “It’s an important matter of principle.”
Of the 33 assets that have been released onto the open market, about half will be sold to existing tenants and developers and the other half will be open-market sales. SWRDA has to generate £20m in receipts as part of its closure and transition agreement with BIS.
Of the major sites, Morlands in Glastonbury is to be completed shortly and agents in the region report a healthy interest in many of the assets despite a patchy market. Thompson says he expects to finish the market sales by the end of June and is “reasonably confident” of reaching the £20m receipts target. Any assets that remain unsold will go back to the market or be offered to the HCA.
Assets being transferred include:
Plymouth City Council (negotiations complete)
- Royal William Yard – an 18-acre waterfront former naval yard, already 10 years into its mixed-use regeneration programme in partnership with Urban Splash.
- Plymouth International Medical and Technology Park (PIMTP) – 40% of the 100-acre park has already been developed, attracting medical and technology business. Seen as a strategic site for diversifying the city’s economy.
Cornwall County Council (negotiations ongoing)
- Eleven land assets around the county, including Beacon Technology Park, Treleigh Industrial Estate and Long Rock Industrial Estate, are seen as essential to support SMEs.
Department for Business, Innovation and Skills (transfer agreed)
- Wave Hub – a 12-tonne facility off the coast of Cornwall designed to test wave-power technology, funded by the public sector and seen as crucial to the development of the UK marine renewables sector. Will be transferred to a special asset-backed vehicle.
Home & Communities Agency (transfer agreed)
- Osprey Quay, Portland – the 64-acre location of 2012 Olympic sailing events has already received substantial investment in readiness for the Games. Further development restricted until after the event.
Open market assets
- Morlands, Glastonbury – 36-acre site on a former tannery acquired by SWRDA 10 years ago. Demolition, decontamination and infrastructure work completed. A deal is expected shortly.
- Winkleigh Airfield, Devon – 14 acres of agricultural land around the old airfield in Winkleigh. Deal to solar farm company fell through; now expected to be sold for agricultural use until market recovers.
- Derriford Business Park, Plymouth – about seven office buildings are on the open market. Plymouth City Council has already expressed interest.
