Agenda item

To consider the report of the City Surveyor

Chair proposed that Commercial Property Review be heard.

The Director Finance introduced the report stating that there were around 600 leases and licenses, many historic owned since wartime and all were within the city.

The City Surveyor presented the report making the following points:

·         There was a substantial asset value of £98.5million with an annual rental income of £8.38 million;

·         In addition, land ownership strengthened strategic control of land use and regeneration

·         A review of disposals would be coming to Executive as a more proactive approach was needed;

·         There were recruitment issues within the team and innovative approaches were being explored to address this; and

·         the funds for the Guildhall were ring-fenced.

The Director Finance and the City Surveyor answered questions from Members as follows:

·         any sales funds not used for debt repayment would need to be invested and may break-even but longer-term interest rates may fall and impact on investment;

·         rents were reviewed with new leases and rent review events. There were opportunities for restructuring of leases in locations such as the High Street and Marsh Barton;

·         there was a budget of £1.7million to address Environmental Performance Certificates when properties were returned;

·         it was requested that the Scout Hut make contact with the team with a proposition and the lease length could then be discussed;

·         the wider corporate aims to reduce carbon impact to objectives would be added;

·         Capital receipts go into the General Fund and were treated as any other funding;

·         interest and capital were paid, as fixed rate loans and all would have a zero balance at the end;

·         there were a number of capital requirements which would need to be prioritised;

·         the government were not encouraging the acquisition of commercial property, hence the Guildhall funds were ring-fenced for use on regeneration activities;

·         Office occupancy was down but Senate Court was amongst the most modern offices in the city which people are willing to pay for, but re-investment was needed to continue this;

·         an asset strategy review was required but should take place after the corporate restructure;

·         some historic assets were used as operational spaces and the Council worked with the historic organisations;

·         there were not many applications under community asset transfer;

·         the city wall was not strictly commercial but a member of the team was working on a repair project;

·         a report would be coming on Belle Isle. Mary Arches was on the market and CityPoint and Clifton Hill will follow;

·         there were government rules around paying back and re-financing of the Guildhall, with a management agent in place dealing with billing, tenants and maintenance, which was also monitored by a Council accountant;

·         there were not really any post-covid trends around voids. The long-term void in the Guildhall was paying rent in full and not sub-letting; and

·         recruitment issues within the team were problematic.

Councillor Mitchell proposed and Councillor Moore seconded the following recommendation which following the vote was carried.

RECOMMENDED that the Executive Committee consider a review of the current Asset Management Policy in relation to commercial property.

RESOLVED that the report was noted.