Agenda item

Commercial Estate

To introduce the Council’s recently appointed property advisers, Hartnell Taylor Cook (HTC) to the Resources Policy Development & Scrutiny Panel who will receive a presentation from HTC on the role they will be playing in supporting the Council in its strategic management of the Commercial Estate. HTC will also provide a commentary on the national and local property market.

 

Minutes:

Richard Long, Head of Property introduced representatives from Hartnell Taylor Cook (HTC) Ian Lambert and Richard Saunders. HTC, the Council’s recently appointed property advisors, gave a presentation (a copy is kept on the minute book for this Panel) on the role they will be playing in supporting the Council in its strategic management of the Commercial Estate. The presentation covered the following points:

 

·  Who is HTC?

·  What difference will the partnership with HTC make?

·  How well is the BANES estate performing?

·  What are the existing market conditions?

·  Conclusion

 

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

 

Councillor Barrett asked why HTC are being introduced now if they have been working with the Council for three years and also what are the financial implications of using HTC. The officer explained that HTC have taken on a new role after a tendering process to replace the previous property advisor earlier this year, before that process HTC had only acted with the Council on individual acquisitions. On the financial issue, the officer explained that there is a fixed rate fee per annum, the figures will be circulated.

 

Panel members queried some phrases used – ‘reversionary lease’ is an extended expiry date; ‘rental tone’ is the established level of rent and a ‘void’ is an empty property.

 

Councillor Rayment stated that the presentation focused on how to get the most money but in the long term, thought should be given to the unique aspects of the city such as independent shops. The officer stated that Bath is in an extremely fortunate position in having a high number of independent shops and the focus for HTC is maintaining the income from the prime pitches (High Street brands) as this allows breathing space in talks with independent businesses where there is a different management approach. The HTC representatives explained that they understand the value of independent shops.

 

Councillor O Brien asked when rents are reviewed, the officer explained that this is done on a 4 yearly basis and rents don’t automatically go up as it would depend on the tone value of the rental area. In the past it was common to have a rental period of 25 years but more recently, to respond to the market, term lengths have been brought down (4 or 8 years is common).

 

Councillor O Brien commented on the need to help independent shops with signage to help drive footfall to the area. Richard Saunders (HTC) explained that in certain areas of the city there are tenant collectives (e.g. Walcot Street Traders) and HTC work to try to promote such areas.

 

Councillor Furse referred to the gearing which is 20.8% (LTV – Load to Value) he stated that his concern is that the authority is dealing with public money so should not take high risks. Ian Lambert (HTC) commented that 20.8% is a low gearing and there is at least 10% headroom.

 

Councillor Anketell Jones asked the following questions (answers are shown below:

 

·  We are heavily dependent on retail – will HTC help us to diversify? The officer explained that asset performance is reviewed, next year there will be consideration given to more re balancing through investment. Ian Lambert (HTC) explained that the value of the Council’s assets are not just in individual properties but also in properties potentially being grouped together.

·  What is the opinion of HTC on the pedestrianisation of Milsom Street? Ian Lambert (HTC) explained that a pedestrianised area has to be liveable and buses rerouted. He added that more information would be needed from retailers. Councillor O Brien stated that caution should be used as pedestrianisation can decrease retail activity.

·  What do you believe attracts retailers to Bath? Ian and Richard (HTC) explained that the environment, architecture and mix of occupiers makes Bath a very popular European destination.

·  Will you be advising Property Services on how they manage the relationship with independent tenants? Ian Lambert (HTC) explained that HTC can be called upon if needed.

 

There was some discussion around Southgate and that there are specific shopper profiles in that area with more modern size requirements in mind whereas the northern centre, the layout of shops attracts a different type of retailer. Retailers go where it suits them and both centres can balance each other. Ian Lambert explained that Cabot Circus initially had a major negative effect on other parts of Bristol when it was first built and that has not happened in Bath.

 

Councillor Rayment asked that the unanimous cross party wish to keep the mix of retailers in Bath be noted by officers and HTC.

 

The Strategic Director stated that officers and HTC have heard and noted the need for balance and efforts will be made to keep the balance right.

 

 

Supporting documents: