Institution news
As you may know a Working Group has been set up to review options (outlined below) for the future of the building and make a recommendation which we hope will gain member support. The Working Group, which is chaired by Past President Patrick Kniveton, hopes to issue its report by the end of the year.
The building is in a prestige location in Westminster and has potential, but considerable investment will be needed to repair and refurbish it if the Institution is to operate here in years to come.
If the building is refurbished to a high specification, we know similar properties refurbished to this level command very high rental income and venue hire income.
While the future of the building is under consideration, we thought it would be useful to give members more information about Birdcage Walk and the costs involved in looking after the building.
As a heritage building it requires significant investment on a regular basis, with IMechE spending around £1.2m of charitable funds per year on maintenance, repairs and running costs for the building.
Chief Executive Dr Alice Bunn OBE CEng FIMechE said:
“Like many old structures, Birdcage Walk needs extensive refurbishment and modernisation. Our facilities team work hard to look after the building, but it is deteriorating, and major investment will soon be needed.”
Over the past two years, the building has suffered the following issues:
- Three serious floods in the basement area from outside sewers and collapsing drains internally
- Emergency repair work to our street-facing stone façade
- Series of repairs of the building’s boilers which have already exceeded their life expectancy
- Some windows on the fifth floor have had to be sealed up to prevent them from falling out
- All heating, ventilation and air-conditioning (HVAC) systems are at end of life and out of date
The work of the Working Group is to weigh up the opportunities and risks involved with the building, looked at through lenses including the long-term strategy of the Institution, financial sustainability and future needs of members and staff in order to come up with a recommended way ahead. In doing so the group is considering a range of options as outlined below.
If you have any questions about the Working Group and the Birdcage Walk review, please email us at Birdcagewalk@imeche.org
Birdcage Walk Options Descriptions
The options fall in to two groups depending on whether the aim is to retain some or all BCW or whether it is to sell BCW.
The options related to retaining BCW in some form all depend on the funding route for making the repairs and possible further improvements to the building.
The options related to selling BCW depend on the perceived requirements of the new HQ as there should be sufficient funds available.
| |
Option name |
Description |
| 1A* |
Sell 3BCW and refurbish 1BCW |
The sale/long lease of 3BCW provides the finance to allow a refurbishment of 1BCW, the office space is brought up to a premium standard, the building services are renewed, service and disabled access are brought up to modern standards. Options to improve the green credentials of the building and improve facilities (e.g., roof garden) may be possible. This is the option developed by RESG. There will be sufficient space for IMechE business with rental income as conference/meeting venue but no excess office space to provide additional rental income. However, with the reduced area this should be sufficient to fund running costs. |
| 1B |
Mortgage and minimum repairs |
A mortgage is raised against the whole estate to enable renewal of building services, essential repairs, acceptable disabled access and some level of refurbishment but no major structural/layout changes. Excess office space will not be upgraded to a premium standard so will continue to yield a lower rental yield (as currently), but it should be possible to improve occupancy levels. Rental income from office and meeting spaces should be sufficient to fund running costs and service a proportion of the mortgage. |
| 1C |
Minimum mortgage and urgent repairs |
A mortgage is raised against the whole estate that is sufficient to enable urgent repairs. These should include work to stabilise the façade, basic improvements to building services, particularly heating, improvements to disabled access and other items identified in the condition survey. It should be possible to continue to use the building as currently and rental income should be sufficient to fund running costs (assuming occupancy levels can be maintained). There is a risk of further failures in the building and services will not meet the latest standards, but this may give the time to develop other funding routes e.g., charitable fund raising. |
| 1D* |
Upgrade BCW with Development Partner |
This may include sale/long lease of some part of the estate to provide the financing along with input from a Development Partner. This would enable a more innovative development that could fully address the issues with access for services and design for improved maintenance and reduced running costs along with more ground-breaking facilities for members. Surplus space could be utilised as premium office space or residential. Depending on financing arrangements there may be some rental income to fund running costs. |
| 2 |
Sell all, buy/lease London |
The whole of the estate would be sold and an alternative smaller venue in London would be purchased or leased. It is expected that this would need some upgrading. The function rooms would be functional and there would be limited scope for additional rental income. It is expected that running costs would be lower. The location would be not as premium as BCW. This would release significant funds for investment which should provide the Institution with an alternative substantial income source to membership subscriptions. |
| 3 |
Sell all, buy/lease elsewhere |
The whole estate would be sold and an alternative smaller venue outside of London would be purchased or leased. It is expected that this would need some upgrading. The function rooms would be functional and there would be limited scope for additional rental income. It is expected that running costs would be lower. It is expected that lower purchase costs compared to option 2 would release more funds for investment. This should provide the Institution with an alternative substantial income source to member subscriptions. |
| 4 |
Sell all, no building |
The whole estate would be sold, and the funds invested to provide an income to the Institution which would then be an alternative funding source from membership subscriptions. There would need to be funds put aside to rent venues as required and staff to manage the additional work. Additional investment would be needed in digital services. Arrangements for staff would need to be made. There would be storage costs for heritage assets and the library. Aside from rental of conference/meeting space it is expected that the other costs would be lower than the ongoing running costs of a building. |
| 5 |
Do nothing |
The building continues to operate as it does currently. It is likely that rental income will continue to fall due to the standard of the office space. At some point there will be a major failure (e.g., boiler not repairable) and the building could be unusable for a significant period. Repair costs will be at premium emergency levels. Alternative accommodation would need to be found for events etc. Running costs would continue to rise as safety risks (e.g., unstable masonry) would need to be managed. |
*It has been noted 8 – 12 Old Queen Street have a value due to the potential to improve rear access. This is of significant value for all parts of the estate and if sold a covenant to retain that access should be considered.