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NHS sitting on 800 ha of land ripe for development

More than 400 parcels of NHS land totalling more than 800 hectares have been identified as potentially ripe for development.

The Department of Health released the figures in the week housing minister Grant Shapps announced enough surplus public land had been found to build up to 102,000 homes.

In total there are 414 potential NHS sites on the list, of which 122 are more than a hectare. Additional details including the type of land, planned date for disposal and physical site constraints are available for 347 of the plots.

Of these, 14 are bigger than 10 ha each, 257 could be used for housing or mixed-use schemes, 11 for commercial premises and 12 for community facilities.

The biggest plot is Frenchay Hospital, a brownfield site owned by North Bristol Trust, which at 65 ha has been earmarked as big enough for up to 450 houses.

The total amount of surplus land is double that identified in a similar exercise last year. However, a health department spokesman said for around a third of the plots identified in the latest round, trusts were undecided over whether they were definitely surplus.

EC Harris global account leader for health Conor Ellis said: “There are pockets of the NHS that haven’t been used for years because trusts were saving them for a rainy day. Now they’re being disposed of 20 years later.”

He said some of the land might be difficult to develop on, but even small plots would be of interest to some smaller housebuilding companies.

Oversight of NHS property is likely to increase in future under a company called NHS Property Services, known as Propco, which is due to be established by 31 March 2013.

Propco will dispose of a proportion of the PCT portfolio, which in total is worth around £4 billion across 4,000 sites. PCTs are set to be abolished next April and some of their land will be bought by foundation trusts before the remainder is transferred to Propco.

Little is known about the plans but Turner and Townsend principal consultant Claire Colgan, who is reviewing property assets and contracts at County Durham PCT, said in her region Propco was likely to have a north of England arm.

This would then be subdivided into north-west and north-east, then again into north Tyneside, south of Tyne and Durham and Tees.

She acknowledged that the structure could be confusing for commercial partners but hoped it would make NHS estate management more efficient.

Tim Byles, chief executive of Cornerstone, which works with public sector organisations and contractors to convert surplus publicly owned buildings to provide public services, welcomed the increasing number of public sector landlords who were “starting to put their heads above the parapet”.

But he said some of the NHS land was “surplus for a reason” due to being in an awkward location.

The plots are spread around the UK, with the most hectares in the South-west and East of England. Although some are listed as having the drawback of “multiple constraints” or “contamination”, 122 have no physical constraints on development.

Mr Byles said he hoped the land would be grouped into clusters rather than sold piece by piece in order to bring economies of scale for buyers.

However, the latest version of the Homes and Communities Agency’s land development and disposal plan says most public sector landholdings will be disposed of on a single site basis.

It says a competitive process, including tender and auction, should be the “normal route” for disposal and that private treaty should be the exception.

To help developers make the most of the public sector sites on offer, Mr Shapps has said he will consider extending the Build Now, Pay Later payment model to “as many previously used sites as possible”.

The scheme is aimed at getting construction work started without developers having to pay upfront costs.

Up to 40 per cent of land suitable for housing development - as much as 7,500 ha - is thought to be sitting idle in public sector landbanks, according to government estimates.

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