Property “tsar” John McCready (pictured) poured cold water on REITs for public sector property at an event in London this morning.

At a breakfast event at The Dorchester Hotel on Park Lane, McCready said there was no reason for the government to put its property into public property REITs. McCready heads up the Property Unit in the Shareholder Executive, which sets the public sector’s property strategy.

He was talking at an event held by networking group Movers & Shakers and PublicPropertyUK.com sister magazine Property Week.

He said there was no benefit in borrowing from property companies with an 8% interest rate when it could borrow from the gilt market at nearer to 3%. McCready said any decision on public sector property has to help cut the £156bn deficit.

However, McCready said there are plenty of other opportunities for property to help the public sector manage properties better: “Over the last decade, a lot of the success in property stemmed from good financial engineering. That is now behind us. What we want now is good property skills.”

McCready also said relocating civil servants and other public sector staff from London would need to be weighed up carefully as it could prove too costly.

Jon Rouse, chief executive of Croydon Council, agreed that the cost of relocation to the north of the UK could be inefficient: “The cost of wholesale relocation is very expensive, if you’re going to a location where people have to move with their jobs, and are you going to lose a large part of your workforce?”

Sir Stuart Lipton, deputy chairman of Chelsfield Partners, agreed that moving public sector workers to Manchester would be “costly and inefficient”. He also said that the public sector should look to keep only its best properties, and sell of secondary or tertiary properties to the private sector.

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