More than £10bn of council-owned property could end up partly in private hands following Croydon Council's announcement that it is to set up a joint venture property development scheme. Sunday Telegraph
Croydon is to create a £450m 'urban regeneration vehicle' with a private developer in a model expected to be followed by other councils. Sunderland, Newcastle and Birmingham are all understood to be working on similar proposals.
Croydon Council will put between £30m and £60m of property assets into a specially created limited partnership, to be matched by funds from a private sector developer, which will also take over the development of the joint venture. Bank debt will be taken on to help regenerate Croydon Town Centre and, in theory, make profits for both the council and the private company.
The vehicle has an estimated target value of £450m.
Croydon launched a tender for the private sector partner last week.
Industry experts estimate that the top 100 local authorities have a total of £10bn of property that could be injected into such public-private joint ventures.
Jonathan Bull-Diamond, partner at King Sturge who is working with Croydon Council, said: 'This vehicle can create a lot of value for both the council and the developer. At the moment the councils are a way behind the regional development agencies, which have already done this, but more and more are getting interested.'
Other councils such as Newham, Dudley, Carlisle and Coventry are expected to announce similar schemes over the coming months.