Somerset Council has postponed the rapid sale of its commercial assets to avoid appearing vulnerable to opportunistic buyers, whom they likened to a “weak wildebeest” targeted by “cheeky bidders.”
Since 2023, the council has been selling surplus land and property, including commercial investments inherited from former district councils. Unusually, the UK government has permitted the council to use proceeds from these sales to fund front-line services—a flexibility set to end after April 2027.
The council’s deliberate, phased approach to asset sales aims to maximize returns for taxpayers and protect the council’s reputation. Olly Payne, Head of Capital Markets for UK Regions at JLL, briefed the council’s property and investments executive sub-committee in Taunton on June 17, endorsing a four-year strategic sale plan.
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Payne explained, “Selling everything immediately would have resembled a fire sale and damaged perceptions, resulting in lower asset values. Our market is heavily influenced by global economic factors such as inflation, interest rates, and geopolitical events.” He noted that the ongoing conflict in Iran has added uncertainty to the commercial property landscape, including prospects for interest rate changes by the Bank of England.
Despite challenges—including rising costs of raw materials and labor—rental growth has been positive due to limited supply and a shortage of new developments. Approximately 60% of the council’s asset portfolio has been sold so far, generating more than £125 million, which is about £8.6 million (7%) above original valuations. The largest transaction was the £14.4 million sale of the Steelite factory in Stoke-on-Trent.
Current offers on five additional assets exceed a combined guide price of £24 million. Buyers have included small property firms, a major French investment company utilizing UK tax incentives, and wealthy private investors attracted to stable property investments.
Council leader Bill Revans welcomed the cautious, measured sales approach but called for clearer, consistent guidance from central government, noting past mixed signals about investment strategies for councils. “We were encouraged to invest and then encouraged to sell. Consistency from Whitehall would be welcome,” he said.
Payne concluded that continuing the steady approach would enable Somerset Council to secure the best possible value for its remaining assets while maintaining its credibility in the market. “News of the sales attracted aggressive bids at knockdown prices. Selling all assets at once would have been a mistake. By pacing sales carefully, we have deterred opportunistic buyers and protected the council’s interests,” he said.