Nottingham City Council has announced its decision to sell Ayr Street Studios, a Victorian-era factory located on Ayr Street.
The property on Ayr Street NG7 4FX, as part of its ongoing asset rationalisation strategy aimed at addressing a significant budget deficit. The decision, outlined in a recent report, is expected to generate much-needed capital as the Council works to navigate financial difficulties and meet legal requirements for a balanced budget.
The Council’s move comes against a backdrop of intense financial pressure facing local governments across the United Kingdom. Nottingham City Council has a budget gap exceeding £50 million for the fiscal year 2024/25.
This shortfall is driven by rising demands in children’s and adult social care services, escalating inflation, and an increasing number of homelessness cases. In response to these financial strains, the Council has been compelled to implement savings of over £36 million between 2024 and 2028.
The urgency of the situation has also been reflected in the government’s decision to grant Nottingham City Council Exceptional Financial Support (EFS) totalling approximately £66.143 million over two years—£25 million for 2023/24 and £41.143 million for 2024/25.
While this EFS is not additional funding, it allows the Council to utilise capital resources, such as proceeds from asset sales, to support essential services and meet revenue requirements. As such, the disposal of assets like Ayr Street Studios plays a key role in the Council’s strategy for financial recovery and stability.
Ayr Street Studios, a Victorian-era building, has been described by the Council as being in “very poor physical condition” and located in a tertiary commercial area. Approximately 75% of the space within the building is currently vacant, primarily due to its deteriorating condition, while 33% of the existing units are non-compliant with current energy performance certificate (EPC) standards. Furthermore, all of the units are anticipated to be non-compliant by 2027.
This presents a substantial challenge, as the building would require significant capital expenditure to bring it up to standard, with no strategic value to justify such an investment. Consequently, the Council believes that retaining this property would be a poor financial decision, as it would likely underperform even with substantial upgrades.
The report highlighted that Ayr Street Studios is highly management-intensive, which further adds to its financial burden. Due to these factors, the Council sees no strategic reason to retain the property, and thus it has been earmarked for sale. The building’s disposal is expected to be handled via an auction process, a method chosen to provide greater certainty and secure a sale within a set timescale. The Council aims to market the property effectively, ensuring sufficient exposure to potential buyers, and has allocated dedicated specialists with significant experience in commercial property transactions to oversee the process.
Legal advice indicated that there were no significant legal obstacles to the sale, as long as suitable terms for disposal are agreed upon and proper due diligence is conducted.
However, as the disposal is at an early stage, there are no agreed heads of terms yet, and
Legal Services have not conducted comprehensive due diligence to identify any potential title defects. It is expected that such due diligence will be conducted to mitigate any issues prior to finalising the sale.
The property is located in the wards of Hyson Green and Arboretum. Local councillors, were consulted on the proposed sale, but no feedback has been received to date. The Council indicated that the decision does not affect those who were not directly consulted.
The decision is subject to call-in by councillors if they consider further scrutiny is needed.
•  Nottingham City Council announces sell off of Embankment pub building
