Letter to the Clerk of the Committee from
the Head of the Parliamentary Relations and Devolution Team, FCO,
dated 13 July 2006
QUARTERLY ESTATE
RETURN JANUARY
TO MARCH
2006
Dear Steve,
In my letter of 3 May I undertook, in addition
to Michael Jay's commitment in July 2004 to send the Committee
regular reports on estate sales, to report purchases as well.
I enclose our latest report, which lists the properties sold in
the fourth quarter of 2005-06 (Annex A) and all properties purchased
in 2005-06 (Annex B).
As with previous tables, the figure shown for
estate sales is the gross sales proceeds. Transaction costs will
vary, but can be expected to average 6-8%—though in the
case of the recent and exceptional sale in Bangkok, which will
be included in our next quarterly report, the percentage was significantly
lower. Three of the properties sold in the final quarter of 2005-06—in
Asuncion, Port Vila, and Nuku'alofa—were the Residences
of a Head of Mission. The property in Perth was the Residence
of a Consul General. These four posts were part of the changes
in our network announced in the House by the Foreign Secretary
on 15 December 2004.
The Committee will note sale proceeds of over
£8 million arising from 245 Warwick Road. The FCO held this
freehold site for development by the Russian Embassy, as part
of a wider reciprocal agreement for mutual provision of sites.
The Russians decided they wanted to sell the site for commercial
development, using the proceeds to fund new Embassy facilities
on their main site at 1-7 Kensington Palace Gardens. We agreed,
in return for a payment of £8.125 million, our fair share
of the difference between the commercial development value of
the site and the (lower) value for diplomatic use. The transaction
was completed on 1 February 2006. We understand that the Russians
have since sold the site to a development company.
Since writing to the Committee in October 2005,
the gross sale proceeds from the sale of the property in Helsinki
in June 2005 have increased from £185,000 to £208,000;
the balance of the transaction was received after we first reported
the sale. In the final quarter of 2005-06, three of the sales
straddle the financial years 2005-06 and 2006-07. The figures
given reflect the gross sales proceeds received in the reporting
period. We will record the balances as they are received in our
quarterly reports for 2006-07.
While writing, I must clarify and correct a
point in the Government's response to the second report of the
Committee on the FCO's Annual Report 2004-05 in respect of receipts
from estate sales. I must apologise for the fact that the figure
provided—£9,859,000—was that for forecast net
estimated receipts rather than for the gross sales proceeds overseas
as intended. Gross sales proceeds from estate sales overseas totalled
£9,673,000. For the Committee's convenience, I enclose a
revised full list of estate sales in the Financial Year 2005-06
(Annex C).
Yours sincerely,
Chris Stanton
Parliamentary Relations and Devolution Team
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