Decision - Property Disposals - Update
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Property Disposals - Update
Decision Maker: Central Services Cabinet Member Meeting
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
1. That the contents of the report, the implications the implications of the current property climate and the progress achieved on disposals over 2008 – 09, together with impending transactions, be noted.
Reasons for the decision:
1. The council has managed some successful disposals despite the economic situation and the restricted property market. Transactions that have been ready to complete on the basis of deals agreed earlier have been concluded where possible. During the current financial year terms have been agreed for an option allowing American Express to buy the council’s freehold interest in the site occupied by their European HQ building. This transaction occurred at a time when large commercial sales were scarce and given the need by Amex to expand its operation in the city and redevelop the existing building it took place at a level reflecting a better market and will result in a significant capital receipt for the council. In addition there have been various indications that the hotel sector has remained buoyant as evidenced by the level of interest in the former Ice Rink site when it was marketed and by continuing interest in the former Charter Hotel. Our strategy has been to take advantage of these pockets of interest in the uncertain property market.
2. Otherwise the prudent view is that it is not appropriate to bring significant properties to the market at the bottom of the property cycle when the eventual economic and market recovery would allow a better return on transactions in due course. Location is often identified as the most crucial factor in regard to value but timing is significant in getting the best out of the market. Other options and delivery vehicles are being explored with various partners as now is the time to prepare for potential disposals so that the council is best placed and in a good position to accelerate any disposal and take advantage of changes in market conditions.
Alternative options considered:
1. Potential property proposals are evaluated through the Asset Management disposal process to identify opportunities for disposal from the investment portfolio. This includes a review of the properties and internal consultation to identify other possible council uses. The property is considered in conjunction with council policies which might direct its use. The process identifies site restrictions and any development potential in preparing for marketing. Once the method of disposal is agreed consultation ensues with ward councillors and other directly interested parties which could dictate whether we market openly or on a restricted basis e.g. community transfer. The disposal will go through several stages including marketing, assessments of bids, approval of terms and finalising the transaction with the preferred bidder.
2. The operational portfolio is reviewed for disposal options and fitness for purpose through the same asset management processes and specific property performance reviews that plot the condition and suitability of a property on a decision matrix where “considered disposal “ may be one of the options. At the start of any disposal process the options are informed by the establishment of the planning criteria and initiation of the consultation protocol. We assess the most appropriate method of disposal for each property. The actions and proposals outlined in this report indentify disposals that have concluded in the financial year, others that are on-going plus the steps taken to keep projects alive and bring other properties to the market.
Report author: Angela Dymott, Richard Butler
Publication date: 14/10/2009
Date of decision: 12/10/2009
Decided at meeting: 12/10/2009 - Central Services Cabinet Member Meeting