Elmbridge Cabinet to consider leasing vacant Esher High Street property to local office firm

• Elmbridge Cabinet is due to consider disposing of the vacant Old Post Office, 81 High Street, Esher, at an extraordinary meeting on 27 October 2026.
• A local office occupier is the preferred bidder, proposing a 10-year lease with an option to buy the freehold between years three and five.
• A nursery provider offering an outright freehold purchase was assessed as providing a stronger financial return but was not recommended as it does not align with the Esher Vision's employment and footfall objectives.
• The property has been vacant since January 2025, costing the council around £90,000 per year in void holding costs.
• The disposal requires Section 24 approval from the East Surrey Shadow Executive under local government reorganisation transitional arrangements.

Elmbridge Borough Council's Cabinet is due to consider approving the disposal of the Old Post Office, 81 High Street, Esher, at an extraordinary meeting on Tuesday 27 October 2026, with a local office occupier identified as the preferred bidder.

The property, a 7,114 sq ft building with 20 parking spaces in a prominent central Esher location, has been vacant since January 2025 and is costing the council approximately £90,000 per year in void holding costs, including business rates, utilities, security and maintenance.

The preferred bidder — described as a local office occupier — has proposed a 10-year lease with an option to acquire the freehold between years three and five. If the option is exercised, the council would receive rental income during the initial occupation period followed by a capital receipt. If not, it would retain the freehold and reconsider the asset's future use at that point.

A second bid, from a nursery provider proposing an outright freehold acquisition, was assessed as offering a stronger immediate financial return and lower risk of future void costs. Despite this, officers have recommended the office occupier as the preferred bidder on the grounds that it better supports the council's Esher Vision, which explicitly seeks to attract businesses to the town centre, increase employment opportunities and boost footfall.

The council originally acquired the property in December 2013 for £2.08 million as a fully let investment property, with a passing rent at the time of £125,000 per annum. It has formed part of the council's investment portfolio, held to generate income and offset government funding shortfalls. Officers concluded that the asset can no longer be re-geared or managed more economically, triggering the disposal process under the council's Asset Management Strategy (2024–2030).

Following a period of strategic review after the property became vacant, an open-market marketing campaign was launched in early 2026 by the council's appointed agents. Interest was received from office, nursery, medical, residential and leisure operators, with formal bids subsequently invited.

The preferred bidder is expected to invest in the building as part of its fit-out, which officers say would improve its condition during the lease term. The purchase option price would be fixed to the current market-tested valuation and uplifted in line with CPI inflation to the date of exercise, a mechanism intended to satisfy the council's statutory duty under Section 123 of the Local Government Act 1972 to obtain the best consideration reasonably obtainable.

Cabinet is being asked to approve the disposal in principle, to submit it to the East Surrey Shadow Executive for Section 24 approval under transitional local government reorganisation arrangements, and to delegate authority to the Deputy Chief Executive — in consultation with the Deputy Leader, the Head of Finance and the Monitoring Officer — to select the preferred bidder and negotiate the final agreement. The Monitoring Officer would also be delegated authority to complete all necessary legal documentation.

Detailed financial information, including the current market value of the property and revenue modelling comparing the two bids across multiple scenarios, is contained in an exempt appendix not published for public disclosure.