Agenda item

This report sets out the proposed 2021/22 Annual Property Plan for the council’s property investment portfolio in pursuance of its agreed Property Investment Strategy objectives, in support of the council’s Medium Term Financial Strategy.

 

Recommendation from the Cabinet Member for Regeneration and Property

Decision:

That the Property Investment Strategy Annual Property Plan 2021-22 be approved.

Minutes:

Cabinet considered a report which set out the proposed Annual Property Plan for the council’s property investment portfolio.

 

The Cabinet Member for Property and Regeneration stated that property provided 12.39% of income, a significant contributor to the council’s ability to provide services.  He added that the Plan focused on key priorities aimed at ensuring that the portfolio was more balanced across sectors such as retail, industrial and offices, was of better quality, offered better opportunities for rental growth and was more defensive and less management intensive.  He stated that JLL, leading property advisors, had been appointed to work with officers to evaluate assets, review underperforming properties that the council may seek to dispose of in the future and enable new development of existing but outmoded buildings and land.  He concluded that benchmarking performance against other council’s property portfolios and against a property index would also be undertaken as well as work to be undertaken to improve the environmental performance of the portfolio including the use of renewal energy, better insulation and energy generation.

Visiting Member, Councillor McCormick addressed the meeting and was encouraged by the environmental performance of the portfolio.  He referred to the loss of retail jobs in the borough stating that a lot of work was required to get people back into work and attract quality higher paying professional jobs into the town.  He referred to expected annual income of £16.3 million and the level of risk given the percentage of income by rental value of industrial, retail and office and the threat posed by Brexit, Covid-19, and changes to ways of working and asked what risk mitigations were in place.  He also referred to investment made for a new office building to be let to Eli Lilly of £8.9 million and asked what investment could be expected for the Aquadrome or town centre.

 

The Cabinet Member for Property and Regeneration responded that there had been a big impact on retail employment however the council were leading on a new town centre strategy and the council had been quick in its response for an economic recovery package due to Covid-19.  He added that by building Eli Lilly a new HQ, high quality jobs had been retained in the borough.  With regard to the vulnerability of the portfolio, JLL had advised that the property portfolio was robust because it was heavily weighted to industrial property which was prospering well with demand for renting warehouse accommodation.  He also advised that in relation to the Aquadrome, budget provision was available for further investment in the Aquadrome to ensure it remained a good facility for residents.

 

Resolved: The Property Investment Strategy Annual Property Plan 2021-22 be approved.

 

Reason for the decision:

 

Implementation of the Plan will build on the work commenced in 2017/18 to increase the council’s rental income and to work towards ensuring a more balanced & efficient property investment portfolio, providing a stable long term source of income which will contribute to the generation of additional income to meet the council’s Medium Term Financial Strategy.

 

Supporting documents: