Agenda item

 A presentation is attached.

The Cabinet Member for Economic Development and Resources, Councillor Richard Samuel introduced the item, he stated that there is a long history regarding the Commercial Estate and not always a happy one. He stated that there is a need for regular inspection in this area which has not always been done when the Council Administration at the time had decided to disinvest. There has recently been an independent review which was reported to this Panel, the recommendations were taken on and actioned. If we want a functioning Commercial Estate, we have to maintain and invest in it. Market conditions are tough. He stated that the public statement was fundamentally incorrect.

The Chair invited Simon Martin, Director of Regeneration and Housing and Richard Long, Head of Commercial Estate, to give a presentation to the Panel which covered the following:

·  Commercial Property Update

·  The starting position

·  Commercial Estate

·  Finance Functions

·  Property Review Project – Governance Structure

·  Commercial Market Outlook

·  Rent Expectations

·  Immediate Priorities

·  New Letting achieved for 2021/22

·  Commercial Estate Arrears

·  BANES whole estate rent arrears position at 4^th April 2022

·  Commercial Estate Priorities – next 12 months

·  Time scales/the year ahead – Commercial Estate

·  Risks to the Retail Structure and Commercial Estate

Panel Members raised the following points and asked the following questions

Councillor Singleton asked how much of the nearly £1m of previous tenant debt will be bad debt. The officer explained that the Income Recovery Team are constantly reviewing this situation, some of the debt is from companies that no longer exist.

Councillor Hughes asked about the decline before Covid and the reasons for this. The officer explained that this was mainly in connection to the retail sector – this was already in decline due to changing trends such as the emergence of online shopping.

Councillor Hughes asked about the average annual rent for new lettings. The officer explained that it is hard to give an average. He added that most of the 32 new lettings are in Milsom Street. He stated that some units can be £5k per year in different areas of the authority. Responding to a query from Councillor Hughes about tenants seeking for reduced rents, the officer agreed that this may be the case.

Councillor Hughes stated that there had been a lot of action based on the 22-page independent report – he asked how confident the officers are in the recommendations and why was this not addressed before. The officer explained that the main areas of challenge in the report were the areas that are being restructured. He further explained that the main benefits of the report were that some basic foundations that have now been put in place.

Councillor Hodge asked what is the nature of the consultation and what is involved in each stage. The officer explained that the consultation is with staff in two teams regarding the reorganisation of resources.

Councillor Hodge asked about risks in terms of team capacity and recruitment. The officer explained that there is strong competition for surveyors, and we need to remain competitive as an employer and succession planning is also important.

Councillor Duguid asked about the impact of inflation. The officer explained that we will see an impact. We need to retain engagement with tenants so we can spot problems. There has been some change to the structure of the leases.

The officer explained that the Property Hub has opened in the city centre which means a more accessible and visible landlord. We are looking at investment in the city as a destination experience which also supports retail eg. Great Bath Feast.

Councillor Duguid asked about the Post Office, the level of service means people are not attracted into the city for this purpose. The officer explained that this is a leased provision, a sub-let within a commercial setting. It is difficult to influence a commercial operation although we could do some intelligence on the lease break.

Councillor Warrington stated that, sadly, some companies may fail – is there flexibility over leases for pop-ups to help with cash flow. The officer responded that this will continue and commented that sometimes pop-up shops have allowed businesses to get a toe hold into the market. The officer stated that he could provide the monitoring results to Panel members (regarding short term tenants converting to long term).

It was RESOLVED that the Panel note the presentation.