Coventry to dispose of Binley Business Park asset

The city council’s cabinet will be asked to rubber-stamp the £3m sale of a 25,600 sq ft building at the 45-acre estate to its occupier, Coventry Building Society.

As set out in a report for cabinet members ahead of the 30 September meeting, officers propose the disposal of Oakfield House on a long leasehold basis.

The proposals is that CBS will pay the council £3m by way of a lease premium upon the completion of the new long lease, and will thereafter pay a peppercorn annual rent, alongside the payment of an estate service charge.

Officers said that the disposal is in accordance with best asset management practice and supports a key existing occupier and employer operating within the city, adding that “the proposed transaction represents best value for the city in terms of financial value and supporting a local business”.

Binley Business Park is an established 45-acre business park in the east of Coventry, to which the local authority holds the freehold interest, with various parts let on short or long-term leases.

Oakfield House provides around 25,600 sq ft of office accommodation over two floors. The building was constructed in the 1990s and is single occupied as an HQ-style building by CBS. In line for disposal are the office building, along with parking and grounds.

CBS’s most recent lease arrangement expired in June, with the current arrangement being a holdover deal on the terms of that lease.

Still mutually owned, CBS now employs more than 2,000 people, many of them based at Binley – both in Oakfield House and two neighbouring buildings.

As is standard in such cases, the various options are set out in the officer report, with four options outlined. The “do nothing” approach is not recommended, as the council’s commercial estate is increasingly showing its age, and will require investment to bring up to modern standards – vacancy rates elsewhere are high.

The second option rejected by officers is continuing to seek a renewed lease with CBS, as the occupier said it cannot justify this along with the investment it will need to make to upgrade the space. Re-letting to another tenant is also not recommended, with the secondary market described as “challenging”.

If signed off, the deal is expected to be completed in October.