Knowle relocation – the estate agent’s view?

The views below are those of an expert correspondent. Owl, needing only the branch of the nearest tree to call it home, is no expert and is happy to hear from others with different views

The build cost of the new building at Honiton must have increased: there is no way they will build it for less than £7 million.

But the big ‘economy with the truth’ is that relocation will be achieved for less than £10 million, because the costs of moving will be very high, not least for compensation to staff for having to travel further to work. Steve Pratten (the relocation consultant) alone is going to cost £1 million by the time the project ends and then there is all the officer time (never, ever costed by EDDC), and legal fees.

The real numbers, in my personal opinion (writes the correspondent) are likely to be:

Exmouth refurbishment:
£2 million

New Build at Honiton:
£11 million
(West Dorset’s new HQ was smaller three years ago and cost £10 million +)

Steve Pratten:
£1 million

Staff Compensation:
£1 million

Officer Time:
£2 million

Legal and other consultants:
£1 million

The move itself (physically relocating, plus things like new notepaper, equipment, etc):
£2 million

And, significantly, the immediate loss in asset value (the new building will only have a value of £2-3 million).

So subtract that figure from the asset value of Knowle (£7.5 million ):
loss of £5 million

Total: £25 million.

The improvements at Exmouth might give a modest boost to the value of the building, say £0.5 million, so a total cost of £24.5 million.

These figures are conservative. In truth, the ultimate cost is probably going to be higher. The ‘officer time’ figure of £2 million looks very low for example. It would not be at all surprising if the ultimate cost is of the order of £30 million.

The refurbishment of the modern buildings at Knowle was estimated at less than £2 million, which looks incredibly good value by comparison.

The refusal of the Pegasus application, together with the current upheaval over local government reorganisation in Devon, offer a clear opportunity to think again.

Cabinet on Wednesday might see the first signs of cracks appearing.

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  1. Pingback: Knowle relocation – the estate agent’s view? | Deirdre Dee Coaching

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