Dec. 6 (Bloomberg) -- Carillion Plc, the British construction and services company, will transfer responsibility for unused offices across the U.K. to Surplus Property Solutions Ltd. in a deal valued at tens of millions of pounds.
Surplus Property Solutions, or SPS, will take over the risk and responsibility for Carillion’s leases on 330,000 square feet (30,700 square meters) of offices, the Glasgow-based company said today in a statement. It didn’t specify how many properties were transferred.
Companies like SPS take on liabilities from leaseholders and try to reduce them as quickly and as cheaply as possible for an upfront fee that covers only part of the total. The companies keep whatever is left over once they have disposed of the surplus leases.
“This deal with SPS has, in a single transaction, enabled us to refocus our resources on our operational estate,” Andrew Thexton-Pee, a senior estate surveyor at Carillion, said in the statement.
Carillion, based in Wolverhampton, will pay SPS an unspecified amount to cover some of the liabilities connected with rented offices it no longer needs, including rent, insurance, tax and maintenance costs for the properties. SPS didn’t say whether it guaranteed that the liabilities won’t return to Carillion.
Provisions totaling 30.4 million pounds ($48 million) in 2009 and 2010 were made by Carillion to cover the costs of leasing properties that were no longer used, according to its 2010 annual report. The company is consolidating its U.K. construction business following the acquisitions of Alfred McAlpine, Mowlem and Vanbots Group.
Real estate broker Cushman & Wakefield Inc. advised Carillion and Jones Lang LaSalle Inc. acted for SPS. Law firms Ashurst LLP and MacRoberts LLP advised Carillion, while Berwin Leighton Paisner LLP and Brodies LLP were SPS’s advisers.
--Editors: Ross Larsen, Jeff St.Onge.
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