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Issue - meetings
Land and Property : Commercial Property Investment Strategy
Meeting: 11/09/2017 - Cabinet (Item 32)
32 Land and Property : Commercial Property Investment Strategy PDF 294 KB
(Council Decision)
Minutes:
The Assistant Director, Financial Services and Revenues, presented a report which proposed that the council make significant additional investments in commercial property for the purpose of income generation, and also to support economic development and regeneration.
The council’s draft income generation strategy identified investment in commercial property as a key area for investment in order to strengthen its long term financial stability. The council already had experience as a commercial landlord and had recently purchased further retail units in the town. The Assistant Director, Financial Services and Revenues, commented that it was beneficial for the council to diversify its property portfolio to mitigate risks of downturns in a particular sector.
The report proposed forming a council-owned property company, which would enable the council to consider opportunities outside of the borough and travel to work area. The report noted historically low borrowing rates, which would be used to support the additional investment. The draft strategy included a matrix to assess potential acquisitions, due diligence work would also be carried out on every potential purchase.
Councillor Chowney proposed approval of the recommendations to the Assistant Director, Financial Services and Revenues report, which was seconded by Councillor Fitzgerald.
RESOLVED (by 6 votes for to 2 against, with 0 abstentions) that:
1) The Commercial Property investment Strategy is approved;
2) Council approve supplementary capital expenditure for property acquisitions of up to £29m for the period 2017/18 to 2019/20 based upon £29m of borrowing commencing in 2017/18 (for economic and social wellbeing purposes and to generate on-going revenue streams). This sum will be reviewed on a regular basis;
3) Cabinet continue to determine the individual property acquisitions, following consideration by the Income Generation Board (Special Cabinet meetings may need to be held at short notice to enable the council to be sufficiently agile to take advantage of opportunities);
4) Delegated authority remain with the Chief Finance Officer (S151 officer) to meet revenue acquisition costs from revenues that are not chargeable against a capital budget – to include abortive costs;
5) The council’s asset management plan is updated to take account of this strategy and that economic development, regeneration and employment considerations continue to be the driving factor behind existing council property and land development opportunities within Hastings;
6) To seek opportunities for commercial acquisitions:
a. Within Hastings and its travel to work area to be procured directly by the council for both regeneration and income generation purposes
b. Via council owned property company for acquisitions outside this area undertaken for income generation purposes alone
7) Acquisitions outside the area to be focused on those areas in the South and Midlands where the local economy is likely to offer the A trading company to be established to provide flexibility of approach – the council is able to invest its own monies under existing investments powers in properties across the country, but anticipates the need to form a company if it wishes to purchase properties outside the borough for the sole purpose of income generation;
8) Appropriate ... view the full minutes text for item 32
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