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Southwark Council will be purchasing its own offices at 160 Tooley Street subject to approval at a council meeting due to take place on the 11th December 2012. The council managed to beat off interest from overseas investers for the 205,236-square-foot building, which is being offered for sale by HSBC Bank.
The council currently has a lease on the building, which is not due to expire until 2033, paying a reported £7.7m each year in rent. The decision that the owners of the building have made to sell it has therefore presented the council with a unique and financially beneficial opportunity. The council’s position is analogous to that of a residential tenant who has been offered the opportunity to buy their home for a mortgage that costs less each month than the rent.
“If the council does go ahead and buy the building, ownership will lead to a reduction in its annual costs which can only be advantageous in these difficult financial times,” comments Eugene O’Sullivan, director at Morgan Pryce, London’s commercial property agent. He adds, “It is also expected that the council would benefit long term by increasing its asset portfolio, and another plus is that in owning the property, the council would have flexibility in how it uses it.”
London Borough of Southwark is situated 1.5 miles away from Charing Cross. It forms one of the oldest parts of London and fronts the River Thames to the north. As with other areas of the South Bank of the Thames, this borough has undergone an extensive regeneration programme. The area is within easy walking distance of the City and the West End, thus over the years Morgan Pryce has witnessed many national and international corporations taking up offices in Southwark. Prime office rents in this area are in the region of £37.50 per square foot and £26.00 per square foot for non-prime office rents.
Soon, services on the new London Overground extension running from Clapham Junction to Surrey Quays will launch. The changes will expand Southwark’s transport network as the new line will bring links to new destinations and new connections.
Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.