Old War Office to become luxury hotel as Ministry of Defence completes sale

Iconic Whitehall building sold as part of MoD plans to make estate savings. Department says it will be "sympathetically restored, redeveloped and re-imagined as a high quality hotel and residential apartments"

By matt.foster

02 Mar 2016

One of Whitehall's most iconic buildings, the Old War Office, is set to become a luxury hotel and apartment complex after the Ministry of Defence completed its sale of the site to a multinational group.

The Old War Office, completed in 1906, sits at the west end of Whitehall. The 580,000sq ft property served as the army's administrative HQ until the creation of the unified Ministry of Defence in 1964, when much of its work moved over to Horse Guards Avenue. 

It was earmarked for sale after being deemed surplus to requirements under the the MoD's Footprint Strategy, which aims to cut the size of the department's estate in a bid to reduce spending.

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Among the ministers who served in the building are Lord Kitchener, Lloyd George, and Winston Churchill, the latter during his 1919-21 stint as secretary of state for war.

The Old War Office also served as the headquarters for the Defence Intelligence Staffs in the 1990s, and was once again the home of the Ministry of Defence for a short stint in the early 2000s as the main MoD building underwent refurbishment.

Defence minister Mark Lancaster confirmed on Wednesday that the Old War Office had been sold to the multinational Hinduja Group and a development group backed by Spanish industrial giant Grupo Villar Mir, with the MoD saying it would be "sympathetically restored, redeveloped and re-imagined as a high quality hotel and residential apartments" complex.

Lancaster said: "I am delighted to complete the sale of the Old War Office. The building has played an important part in our country’s history and presents a unique redevelopment opportunity in an unrivalled location in the heart of Westminster.

The sale reflects our aim of achieving a rationalised defence estate to more appropriately meet the needs of our armed forces and the 250 year lease will ensure the heritage and security of the building for many years to come."

According to the MoD, the property, which went on sale as 57 Whitehall, was sold on a long lease arrangement "for in excess of £350 million". The department estimates that disposal of the site will save it between £8m and £10m a year in running costs.

A statement said: "The sale aligns with the MoD’s Footprint Strategy which aims to create a smaller but significantly better defence estate that will support our armed forces well into the future. The MoD has worked closely with the purchasers, Historic England and other government stakeholders throughout the process."

The sale comes as the government pursues wider plans to shrink its footprint over the next decade. 

Under a "Government Hubs" programme unveiled earlier this month, the number of buildings occupied by government is set to fall by 75% by 2023, with departments increasingly expected to share office space. 

The size of the government estate has fallen by 2.4 million square metres since 2010, according to the central Government Property Unit, while total running costs have been reduced by 28%. 

The Cabinet Office placed a moratorium on the purchase of new properties in 2010, with departments and agencies only allowed to take on new holdings if they will ultimately reduce running costs or save space.

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