Agenda item

To receive a briefing on the extent and operation of the Council’s Commercial Property Portfolio.

Steve Caplan, Chief Officer: Property, gave a presentation in respect of the Council’s Commercial Property Portfolio.  The presentation included: details of the number and types of properties in the portfolio, data relating to rental income and void properties, benchmarking data, an overview of the key functions of the Property Services Team managing the portfolio and a summary of the disposal process.

The Council’s Commercial Property Portfolio included all Council owned properties that were non residential, not occupied for the corporate service of the authority e.g. Easthamstead House and were not occupied or used for the general benefit of the public e.g. libraries, leisure facilities, schools and community centres.  The Council operated a decentralised model, whereby each department managed the properties in use for their operations, drawing on technical support from the corporate tean as necessary.

In Bracknell Forest the portfolio included 11 neighbourhood shopping centres, 106 shops and 95 industrial and business units with a current approximate value at April 2013 of £29million, though this could be as high as £35milion, and gross rental income of approximately £2.5million.  All the retail properties were currently let and discussions were taking place with organisations interested in renting the four empty business units currently on the portfolio.  The Council’s performance compared favourably to the private sector, particularly as there were more onerous obligations on the public sector, for example in relation to the EU Public Procurement directives.

The performance of the portfolio was currently good with premises only being void for as long as it took for the legal formalities to be completed.  Between 2010/11 and 2012/13 income from the portfolio had risen by 2% a figure that compared well to other local authorities.  The rent charged on retail properties varied between £10 and £15 per square foot amounts that were considered sustainable in the current climate.

The tenant was responsible for maintaining and repairing the shop and shop front and service charges were used to maintain common areas.  Regular condition surveys were conducted for all premises and maintenance requirements were incorporated into the Capital Programme. Limited funds to cover the cost of repairs and maintenance were also available through the Revenue Budget.

 Arising from Member’s questions and comments the following points were noted:

• The empty retail unit in Great Hollands Shopping Parade was currently subject to a lease with Londis who had plans to extend the unit by combining it with their adjacent current store.  Officers would contact Londis about the unit’s usage
• The 9% return rate on the portfolio would be lower if the portfolio’s value rose
• If a tenant was not in breach of their lease then the local authority had limited powers to compel the tenant to take work forward or keep the retail unit open to the public however the possibility of incorporating a clause into leases that required a tenant to maintain an active shop would be explored
• The Corporate Property Team provided support to individual directorates as required to ensure that those Council properties that were not part of the Commercial Portfolio were adequately maintained
• There were currently no plans to either increase or decrease the size of the portfolio
• The minimum of1,000 households were required to sustain a parade of shops
• If new shopping parades were to be developed then this would be carried out through the Capital Programme
• Information would be provided to finance officers on the legal limitations on the raising of finance by secured debt on the propert portfolio
• Promotion and signage of the shopping parades formed part of the Corporate Property Team’s remit however this was subject to budgetary restrictions.  Officers would review the signage to Birch Hill shops
• Periodic reviews of the management of all Council properties were carried out through the Asset Management Group.  To ensure that the best possible value was obtained from the entire property portfolio a Facilities Capital Management Strategy was currently under development

The Commission thanked Steve Caplan for the informative presentation.