UK cities eye asset sales to Middle East
Birmingham approached by sovereign funds while Liverpool is reviewing assets, and Somerset is selling farms.
September 22, 2010 1:12 by Reuters
British cities could sell assets worth billions of pounds including airports and prime real estate to plug budget holes and Birmingham is already talking to potential investors in the Middle East.
Faced with demands from Britain’s overstretched government for big spending cuts, Birmingham City Council leader Mike Whitby told Reuters he had been approached by sovereign wealth funds and was talking with the Abu Dhabi government.
“We would allow them to be in partnership with our assets including the National Indoor Arena (NIA, pictured), the Symphony Hall, the ICC (International Convention Centre) and the National Exhibition Centre (NEC),” said Whitby whose council serves over a million people in Britain’s second biggest city.
The NEC Group, wholly owned by the council and which groups together Britain’s biggest exhibition centre as well as other venues such as the NIA and ICC, has fixed assets worth about 750 million pounds ($1.2 billion) according to pre-credit crisis valuations included in the council’s most recent annual report.
NEC made an operating profit of almost 30 million pounds last year, on revenues of 110 million pounds.
Whitby, a member of Britain’s ruling Conservative Party, said wealthy investors had shown significant interest in the city’s ‘Big City Plan’ redevelopment during a recent trip to Kuwait when he spoke to the country’s chamber of commerce.
Such asset sales and foreign investment show how councils could invest in infrastructure despite expected cuts of 20-30 percent in their budgets, and would help the government towards its goal of using the private sector to lead economic recovery.
One councillor who asked not to be named also said Britain’s second biggest city could sell its stake in Birmingham Airport while a spokesperson for the northern city of Liverpool said it was conducting an “ongoing review of assets”.