Silverstone, home of British Grand Prix, is changing hands for just £10m


Silverstone, the historic race track which hosts the Formula 1 British Grand Prix, is to be sold for little more than £10m, according to recently released documents. The sale price stands in stark contrast to the construction cost of purpose-built racing circuits: a new 3.5-mile track, which is set to rival Silverstone, is being built in Wales at a forecast cost of £250m.

The Silverstone track is ultimately owned by the British Racing Drivers Club (BRDC), a group of more than 800 senior motorsport figures currently including the F1 stars Jenson Button and Lewis Hamilton, which took over the lease of Silverstone from the Royal Automobile Club in 1952 and then bought the site’s freehold from the Ministry of Defence in 1971. It now wants to distance itself from the track, which made a £3.3m net loss last year.

In August The Independent revealed that the BRDC was selling Silverstone and this was confirmed the following month when the club announced that Mepc, a property group owned by the BT pension fund, had paid £32m for a 999-year lease on 280 acres of land surrounding the circuit. The BRDC also said it had agreed terms to sell a lease on Silverstone itself but did not confirm the sale price.

However, although the deal for Silverstone has not yet closed, the terms were agreed on 8 August when the BRDC signed a conditional binding agreement to sell its circuit business, Silverstone Circuits Ltd, along with a separate lease of 467 acres of track-related land. As this took place before the BRDC’s 2012 accounts had been filed, they needed to be adjusted to show the value of the circuit based on the sale price.

The accounts show that at 31 December 2012 the track, plant and machinery had a value of £10.8m. This is about a third of the amount that the BRDC spent on building a new pits and paddock complex, known as The Wing, which opened at the track two years ago. It was part of an upgrade which helped the BRDC land a 17-year contract to host the British Grand Prix from 2010.

In a letter to BRDC members on 24 September, its outgoing chairman Stuart Rolt said: “The revised value reflects the commercial value of the amounts offered for the business including upfront payments and the present value of future rental income.”

Although the realisable value of the circuit is significantly less than the construction cost of the new onsite complex, a spokesperson for the BRDC said: “In fact, had the money not been spent to build The Wing and improve the circuit, there would have been no 17-year F1 contract, the circuit would have had no value, and the BRDC would not have been able to secure such a successful deal with Mepc, who were attracted by the on-going value of the Silverstone brand.”

Mr Rolt said the sale price of Silverstone was driven down because the business was loss-making. “The value of an asset that has a locked purpose as a business – in Silverstone’s case to be operated primarily as a motor racing circuit – is largely calculated from the profit that can be derived from it. Typically a multiple of annual profits will be used to generate a balance sheet value.” He added: “We made a net loss in the year … Our circuit assets value reflects this.”

Although the identity of Silverstone’s new owner has not been revealed, it is understood it wants to retain the existing circuit management.

Mepc appears to have got an equally good deal, as the accounts show that the land surrounding the circuit had a value of £50.1m in 2011, which had reduced to £29.7m at the end of 2012. Over the eight months between then and the land being sold, £2.3m of net additions brought it up to the £32m sale price.

The price paid by Mepc for the land around the circuit comes to roughly £114,000 per acre. Adrian Willet, a director at the property adviser CBRE, says: “It is too simplistic to say that the deal struck is below market norms. If conventional housing development could be built, values for consented land are currently circa £800,000 per net developable acre, with industrial land between £250,000 and £300,000 per acre. As always, the devil is in the detail, but on the face of it, this looks like a good strategic play by Mepc.”

Suggested Topics
Have you tried new the Independent Digital Edition apps?
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Life and Style
food + drink
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
David Moyes and Louis van Gaal
Caption competition
Caption competition
Latest stories from i100
Daily Quiz
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

Career Services

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits