Agenda item

There will be a presentation at the meeting on the Commercial Estate. Presentation slides and an appendix are attached.

Derek Quilter, Divisional Director Property and Project Management gave a presentation to the Panel which covered the following:

·  Overview of the Commercial Estate

·  Key Facts

·  Gross Income Growth (Including Acquisitions)

·  Gross Income Growth (Excluding Acquisitions)

·  Breakdown of portfolio by type

·  Property types

·  Commercial Estate Ownership – Bath

·  Interesting facts

·  Current Commercial Estate Objectives

·  Statutory powers

·  Performance of the Commercial Estate

·  Performance

·  Gross Revenue Return Performance

·  Rent Arrears

·  Voids

·  Management Cost

·  Management Team of the Commercial Estate

·  Internal Staffing

·  Critical Partner

·  Acquisitions and Estate Development

·  Acquisition and Restructures

·  Office Development – BQS

·  Major Commercial Estate Development

·  Investment Funding

·  Emerging Strategy for the Commercial Estate

·  Context – Strategic Review Targets

·  Performance Targets

·  Existing Estate Management

·  Acquisition – future approach

·  Commercial Estate Objectives

Panel members made the following points and asked the following questions:

Councillor Barrett asked about the residential section and asked how many properties have been purchased, for how much and what is the income. The officer explained that 15 properties have been transferred to ADL. He added that ADL are producing a business plan that could come to this Panel if requested. He also indicated that Commercial Estate is nevertheless separate from ADL and this needs to be understood as the distinction is important, each having separate governance and objectives.

Councillor Pearce asked if the Council operates on a level playing field with other commercial landlords. The Strategic Director explained that the Council are subject to FOI requests, procurement rules and public scrutiny but that the Council’s tax status is beneficial as is its ability to borrow at exceptionally low rates.

Councillor Furse stated that diversity in the city centre estate is good, the Council should value diversity and local businesses.

Councillor Goodman asked David Stubbs – BNP Paribas if this report is the same as the one that came to the Panel in July. David Stubbs explained that it is a different report addressing different issues. The Strategic Director explained that the report that was brought to the Panel in July was written by officers, informed by work with BNP Paribas and 10% of the report was not included as there were references that were not suitable for publication. He further explained that today the Panel have an updated report which responds to requests for a lot of background information so there is more detail in this report. Councillor Goodman stated that the Panel do not have the full original report that he requested in July. He asked David Stubbs how the department could get the higher figure. David Stubbs explained that the Council could always do better and the key to future success is that targets should be constantly challenging. He explained that there is a big difference in the private sector as there are shareholders and drivers that are hard to inject into the Property department of a local authority. He explained that Shaftsbury Estate is a good exemplar.

Councillor Paul May, Cabinet Assistant (Finance and Efficiency) stated that we are a fortunate local authority to have the volume of property. He suggested a session on Commercial Estate property to explore if we are getting enough out of our properties and also are we investing enough. Councillor Becker supported the idea. He suggested also exploring the suggestion from BNP about premium and luxury brands.

Councillor Goodman asked if we have a strategy for working with shops who are struggling. Richard Long, Head of Property Services explained that officers have a good relationship with tenants and try to monitor rent arrears closely plus have agreed practices to support those that are in difficulty.