Bracknell Forest Council is set to agree a strategy for managing properties it owns across England, which it spent £86 million on. The council used £86.6 million from a public investment fund to acquire six commercial properties to boost financial resilience through rental income.
The six assets are Valentine South Retail Park (Lincoln), the Currys contact centre offices (Sheffield), a warehouse (Stowmarket, Suffolk), an office (Southampton), a warehouse (Redditch) and offices (Northampton).
The council first hit its target of £3 million additional income in 2019/20 and has since realised over £28 million. It recently sold one asset to the tenant in a private sale; the identity of the property and purchaser are not publicly known.
A report authored by Sarah Varley, the council’s assistant director for property, says the office and business sector has performed least well, mainly hit by post-Covid flexible working and a “flight to quality”, including demand for better energy performance. That applies to the Currys contact centre and the offices in Southampton and Northampton.
By contrast, market performance for warehouse/logistical uses such as the Stowmarket and Redditch sites has improved, while out-of-town retail sites like Valentine South are outperforming high street retail.
An external adviser was brought in to value the portfolio and recommended selling one asset and an ongoing management strategy. The report states: “The strategy for the commercial ‘out of borough’ investment property assets as ‘resilience enablers’ is to: secure income streams and/ or capital growth, or dispose of each asset for optimum capital receipt.
“For each of the remaining five assets, an asset management plan has been developed in alignment with the external advisor’s report.
“This suggests a range of options, including re-gearing or renewing some of the leases, and the consideration of asset disposal at the right point of time, to maximise capital receipts and ongoing revenue streams.
Information on the strategy is in a report to the council’s Labour cabinet, which is due to approve the handling of the five remaining assets on Tuesday, February 10. Specific details have been kept private because they are commercially sensitive.
While £28 million has been earned, that still leaves £58 million from the £86 million the council used from the Public Works Loan Board, which was abolished in November 2020.
James Aldridge, Local Democracy Reporter
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