Council to Spend £20 Million on Building on King Street

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Claim deal will ultimately save money because they no longer have to pay rent

155 King Street Hammersmith. Picture: Google Streetview

Hammersmith and Fulham Council are planning to buy a five-storey office building costing nearly £20 million.

The Labour council’s cabinet members approved the purchase of 145-155 King Street, in Hammersmith town centre, on Monday, 6 January.

The block is being sold by pension investment firm Canada Life, from whom the council currently rents the offices for its social services teams.

The council says the investment will make it a big saving because it will no longer having to pay rent for the offices. This will have saved it about £7 million after 20 years.

Much of the £20 million purchase price will be raised from loans.

A report produced for Monday’s cabinet meeting said: “Financial analysis indicates that the borrowing costs… are likely to exceed the rental payments by an average of £140,000 per annum for the first five years.

“Beyond that point, subject to the robustness of the interest rate and inflation assumptions, the borrowing cost will fall below the assumed rental payments and deliver future savings.”

The council was worried that if Canada Life sells the property to another company, that company could try to redevelop the building. This would leave the council needing to find new offices for its staff.

Across the country, councils have increasingly been turning to property investments as a way of making and saving money, after years of funding cuts.

In the 2017-18 financial year, English councils spent a total of £1.8 billion on investment properties, a six-fold increase on 2013-14.

The purchase is due to finalised in “mid-January”, the report said.

Owen Sheppard – Local Democracy Reporter

January 13, 2020