Agenda item

The Director for Estates and Building Services, submits a report on Corporate Estate Management.

Members of the Commission are recommended to receive the report and pass any comments to the Director for Estates and Building Services.

The Director for Estates and Building Services submits a report on Corporate Estate Management.

The City Mayor introduced the item and noted that the report had important corporate implications. The Corporate Estate was an important part of the council’s activities, more recently the council used its assets creatively for regeneration and development on behalf of the city and this was an ongoing report that would be presented to scrutiny annually.

The Head of Strategy and Business Performance noted that:

·      The report was modelled on other property portfolio reports and benchmarked on other business reports which looked into performance and market outlook. Although, this report was late due to the pandemic, the new report would be delivered in summer 2021. 

·      the Council had long invested in the commercial property market and therefore had a very stable portfolio that presented a low risk in terms of the overall contribution to the budget. The Corporate estate was valued at £114 million which bought a gross income of £7.1 million, this represents a good yield of 6.25%.

·      Occupancy across the portfolio was very high as a result of good relationships with tenants. Suitable spaces for smaller businesses was an area that would be looked into in the future and that, some underperforming assets had been sold to produce capital receipts.

·      The difference between the corporate estate and the regeneration estate was essentially, that the corporate estate was a diverse portfolio, with a range of both, long- and short-term leases. This helps balance risks and is managed as a commercial operation. The economic regeneration workspaces are managed workspaces that are held to focus on growth of priority economic sectors.

As part of the discussions it was noted that Officers managed a substantial portfolio incredibly well and the fact the council outperformed other comparable portfolios was down to the Officers skills and competence. Over the decades the Corporate Estates initiatives had helped develop areas such as Beaumont Leys and the development in Hamilton. 

A revised retail strategy was being put together to consider the options for retail development in the city. This was a two-stage process, firstly, the guiding principles to help city centre retailers get back on their feet and the commercial element of the estate and managing that commercially. The second stage would be looking at key factors and case studies, bringing back the strategy to the Commission would help answer questions Members may have on plans of developing the commercial property portfolio.

The valuations of the portfolio were done in accordance with Royal Institution of Chartered Surveyors global standards. Any Officers that were qualified, have to abide and conform to those requirements and it was also confirmed that the valuation of the estate as a whole was also subject to annual audit.

The Director for Tourism, Culture and Inward investment noted that the new Dock workspace at Pioneer Park was a new addition and was already 50% let, work was well underway with the Gresham Apart hotel would also feature a 10,000ft work space which would be operational from September. Some of the options that were being considered for the Levelling Up Fund would potentially include additional workspace schemes.

The Deputy City Mayor for Environment and Transportation noted that corporate estate had a real role to play in reducing the carbon footprint of the city and the council. Over 50% of the council’s emissions came from the buildings and reducing the carbon footprint could also reduce the revenue costs of running those buildings.

AGREED:

1)    That the report be welcomed and Officers were requested to present the report to the Overview Select Committee.

2)    An updated report be bought to the Commission at a later date.

3)      And Officers be thanked for their continuous efforts.