Northamptonshire County Council, advised by PwC, has moved ahead with the sale and leaseback of its One Angel Square headquarters to Canada Life Investments for £64m (€74 mln).
'We believe that this transaction is effective in leveraging the council’s assets and covenant allowing us to maximise the benefit of very competitive pricing at this point in the market,' said Cllr Matthew Golby, leader of Northamptonshire County Council.
'While this kind of deal may be less usual in the public sector the lease-back arrangements being entered would be seen as standard finance practice in the private sector. Put bluntly, without this sale far more service cuts would be required,' he added.
Michael White, Canada Life Investments property investment director, said he was 'very pleased' to enter this transaction with the council. 'The long-term rental stream is an ideal match for income annuity liabilities. It is another good example of private and public sectors working together in mutual benefit.'
The council put the plans to sell the offices on hold last month in the light of its latest financial report.
Following strong recommendations from the chief executive and chief finance officer on the financial impact of not proceeding it decided to now go ahead, according to Golby. The sale and leaseback agreement is for 35 years.
Ainsley Moore, PwC real estate advisory leader, said: 'The council has taken advantage of strong market appetite to release capital at a very attractive rate in a very competitive process between a range of long-term investors.'