This post is by Anna Powell-Smith.
Councils are selling off land: vast swathes of it. It’s estimated that 10 million hectares of public land have been sold in the past four decades, and sales are accelerating. In Gloucestershire, where I live, the council has sold £100 million of land since April 2011 and recently announced plans to sell up to £53 million more.
Who’s buying it all? There has been little press coverage of this fire sale of land, and councils are cagey about reporting it. To find out more, I wrote code to compare a mid-2017 version of the Land Registry’s Corporate & Commercial Ownership data, which lists what UK corporate bodies own, with the latest Overseas Companies Ownership data, which lists what overseas companies own. If titles move from the first dataset to the second, that indicates they’ve been sold to an overseas company.
I found that since summer 2017, local authorities, government bodies and universities have sold public land worth more than £100 million to companies in Jersey, Guernsey, Isle of Man, British Virgin Islands, Malta and Cayman Islands. This is despite David Cameron promising to end property sales to “anonymous shell companies” in May 2016.
These countries are tax havens and secrecy jurisdictions. Private Eye, Global Witness and Transparency International have exposed for years how offshore companies hide the true identity of the buyers, allowing ‘dirty money’ to be laundered through the UK. Yet still the sales go on.
There’s no suggestion that the sales below are being used for money laundering, or even good old-fashioned corruption – the few I can identify look like UK development groups using offshore vehicles. But the problem is, we just don’t know who the buyers are – that’s the point of offshore. And most likely, nor do the public bodies doing the selling!
The government recently announced plans for a register of beneficial owners of offshore companies that own UK property. But campaigners say this is too little, too late: unless draft legislation goes to Parliament soon, the register won’t be in place till 2021.
In the meantime, and despite Theresa May also promising a ‘crackdown’ on companies’ use of offshore tax havens (£), public bodies are still merrily selling off public land – plenty of it to anonymous companies in these “sunny places for shady people”.
The Mayor of London’s Office sells to the British Virgin Islands
The Mayor of London recently made some welcome comments about offshore property sales:
Sadiq has long believed that the legal and beneficial ownership of companies and other entities that own UK property should be more transparent.
However, on 30 January 2017, The Mayor’s Office for Policing and Crime (part of the Mayor of London’s office) sold 546 Sipson Road, Sipson, West Drayton UB7 0JB (Land Registry title NGL348768) to British Virgin Islands company Sipson Property Limited for £6,751,000.
The property is Douglas Webb Section House – ‘section houses’ were halls for unmarried police officers. The sale advert says the site has potential for development “subject to consent”. The decision to sell was made in November 2015. It’s just north of Heathrow, on the very edge of the third runway expansion area – so will presumably become an airport hotel.
Sipson Property Limited doesn’t own any other Land Registry titles, and has no presence online. It’s your classic anonymous BVI company, basically.
Given the comments above, this hardly seems like joined-up government at its best! I wrote to the Mayor of London’s Office to ask why one part of the organisation was condemning anonymous offshore sales, while another part was making them.
Here are their answers to my questions:
- Who are the beneficial owners of Sipson Property Limited? See below.
- Will offshore companies be required to reveal their beneficial owners in future property sales by the Mayor of London’s Office? Response to 1 and 2. As the ownership of companies can change, the Government’s proposals for a public register of the beneficial ownership of overseas companies that own UK property is the appropriate mechanism for improved transparency. This will be more effective than reporting the position at a single point in time such as at the point of sale. The Mayor has expressed previously his desire to Government to speed up its implementation of the register.
- Any other comments about this sale? The disposal of this site followed the standard approach to openly invite bids and accept the highest compliant bid in order to meet best value duties. MOPAC and its advisors followed the appropriate legal requirements for property transactions (e.g. money laundering checks) as part of this sale. There is a legal requirement for solicitors, property advisors and other professionals to report any suspicious transactions or entities to the appropriate authorities. Standard MOPAC terms for forward sale clawback and overage are included in the sale contract.
I’m not convinced by this. Transparency International and others have produced compelling evidence that standard money laundering checks are inadequate. And given that it’s going to take till 2021 to get a register, shouldn’t councils be asked to report the beneficial owners of their buyers in the meantime?
Selling England by the £1 (part 1)
On 14 February 2018, Bracknell Forest Borough Council sold “Land lying to the south of High Street, Bracknell” (title BK334192) to Jersey-based Bracknell General Partner Limited for the princely sum of £1.
This land seems to be part of the regeneration of Bracknell town centre, which is being developed by a joint venture between Legal & General Capital and Schroder UK Real Estate Fund. In April 2016, the council confirmed that the joint venture owned its property via the Jersey-based company, which now owns another 18 titles around Bracknell.
It’s obviously surprising that the sale was for £1, but I’m told by people in the property industry that this isn’t unusual – e.g. sometimes the land is contaminated and the company has to clean it up, or there’s a wider contract attached. Still, £1 does seem, I don’t know, kind of cheap? Even Poundland now charges more.
I asked the council why the sale was priced at £1, and if they knew who the beneficial owners were. They replied! Sort of. Cllr Marc Brunel-Walker, executive member for economic development and regeneration, said:
The Bracknell Regeneration Partnership is a joint venture owned by Legal & General Capital (LGC) and Schroder UK Real Estate Fund (SREF). The sale of this land was part of a wider agreement that enabled the hugely successful regeneration of the failing 1960s town centre to take place, transforming it into The Lexicon which is now ranked among the best shopping destinations in the UK.
Selling England by the £1 (part 2)
Meanwhile, on 12 July 2017, the Homes & Communities Agency sold “land at Randall Way, Retford” (title NT330723) to Guernsey-based Iraf Spyder 1 Limited for £1 plus VAT.
This is a plot of land at the northern edge of Retford. Iraf Spyder companies own 41 titles around the country. We don’t know who owns Iraf Spyder, because the trail goes cold at Guernsey – that’s how secrecy jurisdictions work, obviously. And the HCA hasn’t replied to my query.
On the bright side, though, “Iraf Spyder 1 Limited” is an awesomely sinister company name.
The Essex council leader who’s “biting the hand off” offshore investors
On 7 September 2017, Essex County Council sold “Land and buildings on the north side of Coggeshall Road, Braintree” (title EX805319) to Cayman Islands firm Sammi Developments Limited for £481,500.
From the title plan, this seems to be John Ray House, on the edge of Braintree, a former school gymnasium, register office and a Grade II listed Neo-Georgian building from 1928. According to Historic England it was gifted to the town by the Courtauld family. In March 2016 the Braintree & Witham Times reported that the council planned to close and sell the register office.
One month later, in April 2016, the Braintree & Witham Times reported that neighbouring Tabor House (“19 luxury apartments set in the former Braintree County High School”) was owned by Cayman-based Sammi Developments. The article quotes the leader of Braintree Council as saying:
Tax avoidance is legitimate… If someone knocked at my door and said they wanted to invest that much money in Braintree I would bite their hand off.
Clearly, that’s exactly what happened! (Let’s hope the taxpayer’s negotiating power wasn’t affected by this statement.)
And the rest…
Here are other offshore sales by public bodies that I’ve identified, some very high-value indeed:
- Glasgow City Council sold three titles in the City of London to Jersey-based SLQR Trustee No.1 Limited on 7 July 2017 for a combined £35.7 million. The three titles are: Land at 110-114 Middlesex Street, London (title NGL539021); 112 and 114 Middlesex Street and 1 Widegate St London (title 297320); and 110 Middlesex Street, London (title NGL548118). Checking in the Overseas Companies Ownership data, SLQR only own these three titles: I can’t find out any more about this company.
- Hampshire County Council sold Wessex Fields Retail Park, Frome (title WS30823) to Jersey-based Lydford Limited for £3.5 million on 29 June 2017. Lydford owns eight titles in London and Bath.
- Lancashire County Council sold The Pinnacle, 20 Tudor Road, Reading (title BK242117) to Guernsey-based Standard Life Investments Property Holdings Limited for £13,076,942 on 14 August 2017. This Guernsey company owns 41 titles around England & Wales. Unusually, Lancashire County Council also bought “Land on the south side of Spa Lane, Lathom, Ormskirk” (title LAN166152) jointly with Isle of Man firm SPA Investments Limited for £76,318 on 5 June 2015, and “Land at Statham Road, Skelmersdale” (title LA921650) with the same firm for £198,000 on 11 October 2002. SPA owns about five bits of land in the area, acquired gradually since 2000.
- Leeds City Council sold “Land and buildings on the North side of Belgrave Street” (title WYK348787) to Jersey-based Black Caviar Property Limited (what a name!) for £325,000 on 19 July 2017. Black Caviar is incorporated in Jersey but has a registered office address in Leeds. It shares an address with YPP Lettings, “one of the largest lettings agents in Leeds” and various other property businesses, and owns 5 titles in central Leeds, acquired since 2016.
- Nottingham City Council sold “land on the east side of Beck Street, Nottingham” (title NT492581) to British Virgin Islands firm Regional Land Holdings Limited for £77,500 on 22 December 2017. The firm’s address on the title is “Craigmuir Chambers, P O Box 71, Road Town, Tortola, British Virgin Islands and care of Telereal Trillium, 5th Floor, 140 London Wall, London EC2Y 5DN”. Telereal Trillium describes itself as “the largest privately owned property company in the UK” and has lots of ex-public-sector land. Regional Land Holdings own 15 titles, including a BT building in Hereford.
- Tameside Metropolitan Borough Council sold the leasehold of Globe Park, Moss Bridge Road, Rochdale OL16 5EB (title GM874177) to British Virgin Islands firm Stenprop Industrials 3 Limited for £2,240,983 on 17 January 2018. On the title the company’s address is “Craigmuir Chambers, Po Box 71, Road Town, Tortola, British Virgin Islands and of 180 Great Portland Street, London W1W 5QZ”. This shares an address with Stenprop Limited, which is a UK real estate investment company. The same BVI firm also owns 4 land titles in Peterborough.
- Tunbridge Wells Borough Council sold the leasehold of two titles to Isle of Man firm Eridge Road Developments Limited on 12 September 2017: “Basement Car Park and Public Convenience at the junction of Eridge Road and Linden Park Road, Tunbridge Wells” (title K331872) for an undisclosed amount on 12 September 2017, and “Land lying to the west of Union House, Union Square, Eridge Road, Tunbridge Wells (TN4 8HE)” (title TT28611).
- The London Borough of Southwark sold 700 and 710 Mandarin Court, Centre Park, Warrington WA1 1GG (title CH541251) to Jersey-based Daniel UK Properties Limited for £1,410,000 on 8 September 2017. Daniel UK own 8 titles around the country, mostly land titles on the edge of towns.
- The Police & Crime Commissioner for West Yorkshire sold Brabazon House, 2 Turnberry Park Road, Gildersome, Morley, Leeds (LS27 7LE) (title WYK903627) to Jersey-based NW UK (Pure Offices) Limited for £1,747,500 on 18 October 2017.
- The Oxford Diocesan Board of Finance (a Church body) sold “Land on the West side of Stanbridge Road, Haddenham, Aylesbury” (title BM394731) to Isle of Man company Aston Road Developments Limited for “£16,820,605 plus £3,364,121” on 16 June 2017.
- The University of Southampton sold Bencraft Court, Bassett Green Road, Southampton SO16 3QB (title HP800068) to British Virgin Islands company Bencraft Properties Limited for £4,693,000 on 8 January 2018. This property was previously one of the university’s student halls. There’s nothing about this BVI company online, and they don’t own any other titles.
- Trinity College Cambridge (wealthy landowners, as previously covered on this blog, and a charity) sold “160 to 166 (even numbers) Kensington High Street and 1 to 10 Stafford Court, London” (title NGL112801) to Malta company Unitum Limited for £27,911,395 on 8 January 2018. Unitum doesn’t own any other titles; OpenCorporates says Unitum in Malta was incorporated in August 2017. (Is Malta a tax haven? Oh yes: a German finance minister recently called it “the Panama of Europe”.) Trinity also sold 29, 31A and 31B High Street, Cobham KT11 3DP (title SY152897) to Guernsey company Dahlia Management Limited for £3,000,000 on 19 February 2018.
Why does this matter?
Call me old-fashioned, but I think that if public land is being sold off on a massive scale, we should at least know who it’s being sold to. (I know, I know, I’m just conservative that way.) And there’s really no good reason for anyone to use an offshore company, except to avoid tax or hide something.
The government has promised a beneficial ownership register for offshore companies in 2021. This is not soon enough, and leaves plenty of time for the really dubious actors to cover their traces.
In the meantime, if public bodies are selling chunks of Britain to anonymous offshore companies, surely we should at least know who owns those companies. “This land is your land, this land is my land; from the British Virgin, to the Cayman Islands…”