This is an interesting thought:
And there is a third piece of information that I can now reveal. They had told me that the City Corporation owns about 20% of the property in the Square Mile, and they said
3. “The reference to the City Corporation owing approximately 20% of the property in the Square Mile covers all three funds.”
Again, new information.
I did some playing around with numbers, and wasn’t immediately able to square part 3 with parts 1 and 2. I came up with figures of 70-80 million square feet of rental property in the square mile (see here), with a current going rate of about 50 pounds per square foot – this figure would produce, property income adding up to about 3.5 billion annually in the City; 20 percent of which would be 700 million, a 25ish percent rate of return on 3 billion. That’s a lot. What is more, the City owns quite a lot of property outside the Square Mile, which is presumably worth quite a bit too – so that widens the question.
Darn those capitalist bloodsuckers, eh?
Except (and I do hope that someone who knows more than me will confirm or deny this) I don\’t actually think that The City itself owns and runs the property. I have a feeling that they are more likely to own the underlying land, and that they let this out on long leases to developers who are the people who actually build the buildings and thus gain the lion\’s share of the rental stream. The City getting the ground rent, not the property rent.
Certainly, in The City accounts which Shaxson links to, the rental figure seems to be (although I admit I might only be looking at one fund, not all of them) more like £35 million, about 5% of his estimate.
Anyone able to confirm?
Yup.
The City Corporation will be the ground landlord collecting maybe ten per cent of the rent passing. The long leases will typically belong to developers such as Land Securities, British Land etc. who put up the buildings and let them.
Yes, exactly. I noted this very discrepancy, didn’t I? And asked the question as to why that may be, and offered one or two possible explanations, and hedged it with all those ifs and buts (which you for some reason forgot to mention – it’d be a shame, of course, to let that get in the way of a good story, eh?) But you see there are two ways of looking at this. Taking a look at property holdings and coming up with a guess for its income. And taking a look at property holdings and coming up with a figure for assets. And that, the blog notes, raises some other, rather interesting questions. All worth asking. if you can provide some answers – real, clear, concrete answers – ’cause this thing is outside the scope of freedom of information requests – then you will be doing us all a service!