Project
Malsis School operated as a co-educational day and boarding preparatory school for three to thirteen-year-olds prior to its closure in December 2014 after the bank appointed administrators. Eddisons were asked to provide advice on a strategy in order to achieve a timely disposal. Property issues were complex and included existing options to purchase, various planning scenarios, ongoing holding costs (particularly with regard to maintenance and upkeep of historic listed buildings), and interest/scrutiny of the process from the local community/politicians/and ex-pupils.
In addition to dealing with the property, Eddisons were engaged by the administrators to dispose of the entire contents of the school and assets within the building. The assets included antique furniture; grand pianos; ground maintenance, woodworking and catering equipment; classroom and bedroom furniture; and specialist IT equipment.
Eddisons also arranged insurance cover and dealt with associated compliance issues and security matters.
Approach
Eddisons Insurance Services developed an innovative insurance and risk management solution in conjunction with a major insurance broker. Security was initially provided by static man guards on site from the date of closure until a number of temporary monitored alarm systems (RemoteZone) were installed, and a number of property guardians were recruited to live on site and provide a visible presence. Property guardians provide a valuable means of communication with regard to site security, and activate lights in addition to vehicles entering the sight throughout the day to give the appearance that a property is fully inhabited. A head guardian is appointed who holds responsibility for carrying out a weekly fire alarm test, and enabling access to the site for emergency services as and when required. Guardians live on site under licence in the knowledge that they may receive notice to leave within a four week period.
In addition to utilising temporary monitored alarm systems and property guardians, we carried out a number of general site security improvements, including the supply and installation of two vehicle barriers to protect the site from unwanted visitors. A number of vulnerable ground floor windows were boarded up, a fault on the fire alarm was repaired, and the site was cleared of combustible items in line with insurer’s requirements.
Our Machinery and Business Assets team was engaged to deal with the disposal of the contents of the school. Some 1,400 lots owned by the school were itemised and valued by the team. A specification for each item was drawn up and photographs taken ahead of launching an online auction.
The challenge was to secure a sale of the property and achieve the most beneficial outcome for the creditors/administrators, balancing price against holding costs (and potential deterioration of the asset through an extended hold position).
In terms of price, the value of the site could clearly be enhanced through planning gain. Detailed meetings with the local authority planning team took place and residential development scenarios were explored alongside planning applications previously lodged prior to administration by option holders (including enabling development). Key to planning was the delivery of a Community Use Agreement and how that could be actioned, given the demise of the school. The ‘Options’ previously entered into with developers had to be legally tested so that the site could eventually be sold free from them. Development opportunities were not, of course, restricted purely to residential and all potential uses were considered and explored (e.g. hotel, care facilities, ongoing educational use).
As protracted marketing/holding costs were to be avoided, ideally an unconditional sale was sought (with the benefit of the resolution to grant planning under previous applications), although planning conditionality was not ruled out.
A bespoke brochure for the property was prepared and full/extensive marketing was undertaken, covering direct mailing to potential occupiers/developers, local/regional and national advertising, press coverage/releases, website coverage, marketing boards, etc. This resulted in an extremely good level of interest being generated, resulting in several bids being received.
To complete the sale, a best and final process was undertaken to give all serious bidders the opportunity to submit their best offer. The resultant sale was at a level exceeding expectations, given the complicated nature of the asset.
Results
– The auction was marketed via specialist press, advertising, email and social media, which attracted bidders from around the world to participate in what, was a highly competitive online auction.
– The site did not suffer any internal security breaches and was completed and handed over to the new owners.
– The insurance and risk management solution was highly cost-effective and retained by purchaser post-sale; the new owners have retained two RemoteZone systems on site to assist the live-in caretaker while the site development is under way.
