Agenda item

Contact Officer: Martin Jones

The purpose of this report is to introduce a presentation by the council’s appointed property advisers Jones Lang LaSalle (known as JLL) on the council’s proposed Property Strategy 2021-2025.


The Head of Property and Assets introduced Nigel Golder, Katie Kopec and Jack Tompkins from Jones Lang LaSalle (JLL), the council’s appointed property advisers, who provided a presentation to the Committee on the council’s proposed Property Strategy 2021-2025.


The Committee discussed the presentation and made the following comments:


·         Sought the advisors opinion of what the direction of travel should be for the Council. JLL responded that the Council had a good spread of capital and income risk, a long term revenue position with strong stability and there was no need to panic following the effects of the pandemic. Part of the strategy would be to address the management intensity of the assets and whether they played an important role on a social economic basis or through direct revenue return for Basingstoke. The long stock issue and ESG position needed to be reviewed. The Council could also look at regeneration projects to further diversify the portfolio.


·         Was there a geographical or overconcentration risk that of all the investments tended to be located in and around Basingstoke. JLL advised that Basingstoke was large enough to invest in and it allowed the Council to have the ability to regenerate or have control or interests over major sites. It also allowed the Council to fill any gaps and further future proof Basingstoke in order to build resilience.


·         Was the Council possibly excluding potential purchasers by keeping long term rents instead of selling them outright. JLL responded that it depended on supply and demand and that work was currently underway to evaluate specific sites and the benefits and negatives of granting a long or short lease.


·         Stated that local authorities were unable to move as quickly as other private companies and questioned whether the new strategy would have the same flexibility to work within a framework but still have the freedom to make deals. JLL responded that they would outline a five year strategy so that the Council could be competitive in the market place and clear on the end goals. The Executive Director confirmed that a funding options paper for the property fund was being produced.


·         The Committee would like to review the funding paper at a future committee meeting.


·         Questioned how and when the Council could factor in post Covid opportunities. JLL advised that analysis was currently underway of the sector and internationally of places that were further out of the pandemic. Basingstoke could potentially take advantage of new models and ways of working such as hubs.


·         Some members would not like to see residential opportunities pursued only because they were an easier option.


·         Some Members felt that smaller assets shouldn’t be disposed of only because they were management heavy as they also provided a lot of benefits to the borough as a whole.


·         Questioned whether pursuing more residential opportunities was a viable option. JLL advised that it was predicted to be the biggest investment sector over the next 20 -30 years and that residential investment provided regeneration, long-term income and had attributes to produce capital.


·         Queried credit quality and the percentage of the portfolio that JLL would any concerns over. JLL advised that it was not viewed as a high risk portfolio  and estimated that it was 80% secured and 20% with some vulnerability to market volatility


The Cabinet member advised that they would not rule out the sale of freeholds but it depended on the individual circumstances.


Resolved: The Committee notes the report.


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