The Government has launched its latest transport-related asset sale, flogging its stake in the King’s Cross Central redevelopment with all the proceeds to go back to the Treasury.
With the taxpayer holding a 36.5% stake in King’s Cross Central Partnership, the group developing the 67-acre site, the sale could raise around £360m the Office for Budget Responsibility (OBR) said.
Featuring offices, shops, colleges, homes and parks and occupiers including Google, BNP Paribas Real Estate and University of the Arts London, the entire estate could be worth around £5bn when completed by at the end of the decade.
Transport minister Robert Goodwill said: ‘By selling the government’s shares in King’s Cross Central we are selling an asset we no longer need to keep and realising its value for the taxpayer. The sale will help reduce the deficit and by doing so deliver lasting economic security for working people.’
Investment bank Lazard will handle the sale, supported by Savills as real estate advisers.
The news follows the Government’s divestment of its stake in Eurostar, which raised consternation among unions as the channel tunnel operator has seen sustained traffic growth every year for the last decade. The UK’s dividend was up to around £8m a year.
There is also the potential of a fire sale of property assets at Network Rail after the rail operator appointed the investment bank Rothschild to assess its £1bn commercial property portfolio.
Network Rail has experienced a woeful summer of fines, ministerial and public umbrage, significant managerial reorganisation and the suspension of major works.
Its £38bn debt is on the public balance sheet after it was brought back into the public sector last year, making it likely the Government will consider ways it can raise cash.
The Financial Times reports that Alexander Jan, a director at engineering group Arup has urged ministers to consider transferring the land to local authorities instead of selling it off. Councils could then be given more powers to keep the taxes generated.
‘That would allow rail capacity to serve development and vice versa,’ he told the paper.