Agenda item

Investment Asset Update Report

Meeting of District Executive, Thursday 2nd September 2021 9.30 am (Item 66.)

Decision:

RESOLVED:	That District Executive recommend that the Chief Executive agrees to:-
	a.	note the resilience of the property investment portfolio throughout the Covid-19 pandemic;
	b.	note progress made to date in acquiring new commercial property investments and the asset management following acquisition;
	c.	note the return being achieved across the portfolio which is in line with the Council’s target of 7%
	d.	note progress being made in securing income from our existing assets and the contribution to the revenue budget towards the revised £3.35m target;
	e.	note progress being made in disposals and transfers of existing assets, resulting in a reduction of future liabilities associated with these assets;
	f.	approve the proposal for the reduction of requirement for reporting to the pre-Covid-19 frequency of every six months, rather than every three months, in light of the more settled economic landscape, with a quarterly dashboard type progress document.
Reason:	To provide Members with a quarterly update on progress with implementing the commercial investment component of the Commercial Strategy agreed by Council.

Minutes:

The Portfolio Holder for Economic Development advised that the investments were made to support vital council services. Progress was all good and there was only £15.5m left to invest. The battery storage facility was exceeding its expected income. He welcomed the Property Investment Project Manager who analysed the investment opportunities for the Investment Asset Group to consider.

The Property Investment Project Manager advised that:

· rental income was at 98.7% recovery – only £8,000 short of 100% collection.

· Three units were currently vacant.

· The multi-let portfolio was managed by Savilles and they were paid by the tenants service charges.

· No additional property had been purchased during the last quarter but construction on the coffee pod in Glastonbury was due to start shortly.

· They continued to assess markets for investment opportunities for the remaining £15.5m.

· The battery storage site in Taunton was delivering in excess of budget and the Fareham battery storage project was on budget.

· The Marlborough housing development – 2 houses were sold and 1 was under offer and 3 flats were under offer. When all were sold, there would be a £2m return on expenditure.

In response to questions, the Property Investment Project Manager, the Section 151 Officer and the Portfolio Holder advised:

· The original agreement at the battery storage site in Taunton was to repay the loan first and there was no suggestion to change this.

· The figures from the battery storage site in Taunton were not included in the graph and it was hoped to have income in line with the projection by the end of the calendar year.

· The Marlborough project was expected to break even and £500,000 of receipts was intended to fund the Wincanton Regeneration Project.

· The MTFP report in October would propose a halt in investment in the new financial year due to the tightening of the CIPFA financial code.

· A new Commercial Strategy and Financial Strategy would be presented to District Executive the following month.

The Chairman of the Scrutiny Committee said that they had requested further information on the Marlborough development at their next meeting. They had also asked why assets had devalued in some cases and officers were to respond direct to the Member.

At the conclusion of the debate, Members unanimously agreed the recommendations be proposed to the Chief Executive for approval.

RESOLVED:	That District Executive recommend that the Chief Executive agrees to:-
	a.	note the resilience of the property investment portfolio throughout the Covid-19 pandemic;
	b.	note progress made to date in acquiring new commercial property investments and the asset management following acquisition;
	c.	note the return being achieved across the portfolio which is in line with the Council’s target of 7%
	d.	note progress being made in securing income from our existing assets and the contribution to the revenue budget towards the revised £3.35m target;
	e.	note progress being made in disposals and transfers of existing assets, resulting in a reduction of future liabilities associated with these assets;
	f.	approve the proposal for the reduction of requirement for reporting to the pre-Covid-19 frequency of every six months, rather than every three months, in light of the more settled economic landscape, with a quarterly dashboard type progress document.
Reason:	To provide Members with a quarterly update on progress with implementing the commercial investment component of the Commercial Strategy agreed by Council.