09/02/2026
Public Sector Property SolutionsBudget pressures continue to tighten across the public sector, making effective asset management more critical than ever. When buildings no longer serve their original purpose, the challenge becomes clear: how do you extract maximum value while ensuring compliance, transparency and efficiency throughout the disposal process?
Whether you oversee a local authority portfolio, manage NHS estates, or handle education facilities, understanding your options can mean the difference between leaving money on the table and securing the best possible outcome for taxpayers.
This guide outlines the key considerations for maximising returns from surplus public sector assets.
Understanding what makes property surplus
A property becomes surplus when it no longer meets your operational requirements. This might occur due to service reorganisation, reduced capacity needs, building condition deterioration, or strategic estate rationalisation.
Identifying surplus property early allows you to plan effectively rather than react to mounting costs. Regular estate reviews help you spot underperforming assets before they become financial burdens.
You should assess each property against current and future service delivery requirements, considering factors such as location, condition, running costs, and alternative use potential.
Surplus property valuations
Before making any disposal decisions, you need to understand what your property is worth. Professional valuations provide the evidence base for your strategy, whether you plan to sell on the open market, negotiate a private treaty sale, or explore alternative disposal routes.
Market conditions fluctuate, and what seemed like an attractive option six months ago may no longer represent the best value. Your valuation should account for current market dynamics, development potential, planning considerations and any specific factors affecting marketability.
Remember that different disposal routes may unlock different values. A property suitable for residential conversion might attract premium prices from developers, while an office building could command higher rates from commercial investors.
Disposal route options
You have several options when disposing of surplus property, each with distinct advantages depending on your circumstances:
- Open market sale – Maximises competitive tension and typically achieves best price, though timescales can be longer
- Auction – Creates urgency and certainty of completion date, ideal for properties requiring investment or with development potential
- Private treaty – Allows negotiated terms and can expedite transactions when you have identified suitable buyers
- Community asset transfer – Enables local organisations to acquire property at below market value for community benefit, delivering social value alongside financial return
How can planning and development potential impact my options?
Your property's value extends beyond its current state. Planning status and development potential significantly influence marketability and price. A site with existing planning permission or allocation for residential development will attract different buyers than one restricted to its current use.
Working with planning specialists helps you understand what is achievable before marketing. You might commission feasibility studies, engage with local planning officers, or even pursue outline planning permission to de-risk the opportunity for potential buyers. These upfront investments often deliver substantial value uplift.
Development potential does not always mean demolition and rebuild. Change of use permissions, extensions, or refurbishments can all enhance value. The key is understanding what the market wants and how your property can meet that demand.
Are there any compliance and governance requirements to consider?
Public sector property disposal operates within strict frameworks. You must demonstrate best consideration, ensure transparency, follow procurement regulations where applicable, and maintain clear audit trails throughout the process. These requirements protect public interest but add complexity to disposal strategies.
Best consideration does not always mean the highest price. You can accept lower offers if you can demonstrate broader public benefit, though you must document your reasoning thoroughly. Community asset transfers, for example, allow below market value sales when they deliver measurable social value.
Navigating these requirements while pursuing commercial objectives requires specialist knowledge. Understanding what you can and cannot do within regulatory boundaries helps you maximise value without compromising compliance.
Getting expert support with your surplus property
Disposing of surplus property demands expertise across multiple disciplines: valuation, marketing, legal, planning and negotiation. While you might have some capabilities in-house, specialist advisors bring market intelligence, buyer networks and transaction experience that can significantly improve outcomes.
Our public sector property solutions team has supported organisations across local government, healthcare, education and emergency services. With more than 180 years of experience and 35 offices nationwide, we understand both the commercial realities and the unique requirements of public sector asset disposal.
If you are considering your options for surplus property, please complete the form below to arrange a confidential discussion about your requirements.
