Qatar Investment Authority (QIA), who already own Harrods, are looking to lease another major UK landmark as they are thought to be the preferred bidder for the famous Silverstone Formula One circuit.
The circuit is owned by the British Racing Drivers Club (BRDC), and apparently it is conducting exclusive talks with the sovereign wealth fund to lease the site for 150 years in a deal estimated to be worth £250 million. According to a report in the Independent, a shortlist of potential bidders was drawn up by PricewaterhouseCoopers.
At the moment QIA is conducting its due diligence, and a decision is expected within the next six months. Silverstone needs an investor to cover the costs of redeveloping the 850 acre complex, as the BRDC has had to borrow a substantial amount of money which is unsustainable in the long-term. They view being able to lease the site to a substantial investor such as a sovereign wealth fund as being the best option, and it is thought that one of the major conditions of the lease is that the site must be maintained to a standard which makes it a suitable to host the British Grand Prix after 2017, and that it must remain as a motor racing venue.
There is additional land available which is adjacent to the site, and the BRDC has already submitted a planning application for three hotels, a motorsport museum, an educational campus and technology and business parks. If the application is granted it would make the circuit a much more attractive investment, as the BRDC reported a £1.9 million pre-tax loss for the year ending December 2010, in spite of hosting a near capacity crowd for last year’s Formula One race.
BRDC members are set to get a windfall from the sale of the lease, and the club is owned by 850 racing personalities, including Nigel Mansell, Jenson Button and Lewis Hamilton. The site was last valued in 2005 at £61 million, but has undergone substantial renovations since that date.