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Joshua Rozenberg
Monday 5th October 2009
Supreme Court Sold

The Supreme Court has been sold by the builders for more than £30 million.

Prupim, an investment manager, announced today that it had bought the leasehold interest from Keir Property on behalf of its Prudential Annuity Fund .

I explained the background in my recent Radio 4 documentary:

The government was looking for a way of reconstructing the building on the never-never. Eventually, they lent Middlesex Guildhall to the builders for 30 years. The builders then leased it back to the government, charging an annual rent of £2.1 million, increasing at 2.5 per cent a year.

If the government had borrowed the money to pay for that, it would have cost them £48 million at current rates. By my calculation, that's the true cost for taxpayers of the building contract, although the Government has included the supposed social benefits of having the new court open now and come up with a rather lower figure of less than £37 million

It follows that the investment managers will collect the rent for the rest of the 30 years. Then the building will revert to the Crown.

It's no surprise that Keir didn't want to hang on to the building: they're builders, not investors. But what I can't tell you is whether they have have got a good price for their interest.

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About Joshua Rozenberg

Joshua Rozenberg is an independent legal commentator who presents Law in Action on BBC Radio 4.

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