Request for authority to sell Pickering House, Ealing

Report: 11
Date: 15 June 2006
By: Commissioner

Summary

This report requests authority for the disposal of the residential quarters at Pickering House, 271 Windmill Rd, Ealing.

A. Recommendations

Members are asked to approve the unconditional sale of the MPA’s freehold interest in this property for the sum of £3,850,000 (Three million eight hundred and fifty thousand pounds) to the highest bidder as shown in Exempt Appendix 1.

B. Supporting information

1. As part of the implementation programme for the MPA’s agreed residential accommodation strategy, Pickering House, a block of 18 flats, is now surplus to requirements.

2. The site has been marketed openly for sale by informal tender over the last few months, with advertisements appearing in the national property press. Best bids, unconditional upon the receipt of planning permission, were invited.

3. Thirty-four bids were received in the first stage of the tender. Four parties were shortlisted, and a second stage of bidding called, inviting best and final unconditional offers. The lead bidder at stage 1 was invited to bid at stage 2, but declined to do so. The results of this final round are attached as Appendix 1 (Exempt).

4. Conditional bids were not invited but one such bid was received at the 1st stage, although it was not the highest. There are a number of disadvantages to the MPA in accepting an offer which is conditional upon planning:

5. There is no guarantee that the scheme as proposed will be granted planning permission.

6. If planning consent is not granted the purchaser will either seek to renegotiate the purchase price (to a lower figure) at a later stage, or may withdraw from the purchase altogether.

7. Any prolonged downturn in the commercial or residential market will affect a developer’s profit margin and may adversely influence a decision to proceed with the purchase.

8. There is a high degree of risk in accepting a conditional bid in this type of market, where there is no certainty of realising the proposed purchase price.

9. Funds would not be received until receipt of planning permission and no certainty can be placed on the time scales to obtaining planning consent.

10. The recommended unconditional bid represents certain income receivable now, and includes both sales overage and a forward-sale clawback clause to enable the MPA to benefit in the event that the site is sold on at a price in excess of that paid to the MPA.

11. Members should note that the recommended offer is in excess of the original 1st stage lead bid.

C. Legal implications

1. Apart from normal property contract matters there are no specific legal implications to report save as already noted.

2. Appropriate overage and clawback provisions are in place to protect the Authority.

D. Race and equality impact

1. There are considered to be no equality or diversity issues arising as a result of this disposal. The Local Planning Authority is also under a duty to consider such matters when a planning application is being reviewed.

2. In the event of residential redevelopment, the provision of key worker or social housing accommodation at this site will need to meet the requirements of the Local Planning Authority, as and when granting planning consent for development.

E. Financial implications

The proceeds of this transaction have been included in the Property Services’ Capital Receipts’ budget for 2006/2007. In line with the MPA/MPS estates’ strategy, Building Towards the Safest City and Property Services’ Interim Operational Plan, receipts will be recycled and reinvested in the estate.

F. Background papers

None provided

G. Contact details

Report author: Alan Croney, Director of Property Services, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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