Biggest land sale in a generation hits the market

In the biggest single land sale for a generation, the 23,300-acre Lake Vyrnwy estate in Powys, mid-Wales, is being sold by utility company Severn Trent – and its 125-year lease makes the sale even less ordinary.

Selling agent Knight Frank is offering the estate in four lots, with a guide price of £11m for the whole.

The firm’s Tom Raynham said the decision to sell the estate on a lease, rather than freehold, reflected the vendor’s desire to make sure successful management of the estate was of primary interest to the new owner. “It’s also to ensure the lake’s catchment area is protected for future generations, as the reservoir still supplies much of Merseyside’s fresh water.”

Mr Raynham said he expected interest mainly from institutional and corporate investors, but added that the decision to lot it four ways meant there could be opportunities for local investors or consortiums to acquire all or part of the estate.

Tony Wray, chief executive of Severn Trent, said the company’s decision to divest itself of Vyrnwy Estate was that its core business was providing water to its customers, rather than land management activities. “Other organisations exist that can concentrate more intensively on running the land at Vyrnwy. We are committed to continuing our operational role at Vyrnwy and will retain a site presence to ensure this valuable asset is managed effectively and sustainably.”

At the heart of the estate is the popular tourist destination of Lake Vyrnwy itself, a 1200 acre Victorian reservoir nearly five miles long.

When it was completed in 1888, at a cost of £625,000 (about £22m ­today), the lake encompassed the first stone-built dam in the UK. Nearly 70 miles of aqueduct and pipework allowed the reservoir to feed the city of Liverpool, and the flooding of the valley caused the entire village of Llanwyddyn to be relocated.

Vyrnwy’s farming operation covers more than 11,000 acres of mainly hill land and rough grazing, farmed in partnership with the Royal Society for the Protection of Birds.

A further 5250 acres are let, mainly under Agricultural Holdings Act tenancies over a dozen farm units.

There are 31 residential and commercial properties, and more than 5000 acres of woodland are managed by Forestry Commission, Wales.

Lot 1 includes the land farmed in-hand and much of the catchment area for the lake. It is run under a management agreement with the RSPB. It is farmed organically on a 50:50 profit-share basis and is grazed mainly by sheep, although this moorland supports ponies and cattle. RSPB manages the moorland environment through cutting strips in the heather to encourage regeneration, avoiding the more widely practised method of burning.

An agreement with the RSPB means it will continue to manage the majority of this land as an RSPB Nature Reserve until 2019. However, there are a number of redundant farmsteads that could be restored, subject to the appropriate planning consents, says Knight Frank.

Lot 2 covers all the land let on short- and long-term agreements. Most are on 1986 AHA tenancies, although there is a Farm Business Tenancy on one of the holdings and four Tenancies at Will.

Lots 3 and 4 comprise the woodland, managed by Forestry Commission Wales, and 27 residential and two commercial properties.

A 30-year lease for surface ­amenity rights over Lake Vyrnwy is available by separate negotiation. “There’s significant potential for an investor to develop tourism here, providing a boost to the local economy and employment in the area,” said Mr Raynham.