Commercial Portfolio update
Report of Councillor Paul Hewett, Executive Member for Property & Projects.
Councillor Hewett introduced the report stating that the management of the Commercial Property portfolio remained an essential part of the activities as a Council which enabled businesses and residents to thrive. Over the last five years assets had generated around £3,000,000 in return per year which had enabled investment in other projects and avoided a higher increase in council tax for Breckland residents. He continued to say the Council had adopted a proactive approach to managing the £45,000,000 property portfolio. He explained that the last year had been tough both on the portfolio and results, and especially so for tenants in the retail and hospitality and leisure service sectors.
Councillor Eagle thanked the team for an excellent and comprehensive report and asked if the Council were looking at expanding into small office space, particularly in the market towns which, he felt, would increase footfall and attract people to live and work in Norfolk.
The Assistant Director for Property and Projects, Ralph Burton, confirmed it would be part of Breckland Council’s investment strategy and were always looking at the performance of the portfolio and any disposals or acquisitions and seek opportunities to expand businesses in Breckland.
Councillor Jermy asked about the occupancy level of the Business Centre in Thetford which remained consistent with a letting potential of 84% and asked if the remaining 16% was within the same area or would it be considered an unlettable area and therefore should not be included in the target.
The Assistant Director for Property and Projects explained the 16% was not one consistent space, and that it varied with the units around the building that were not let at different times. He stated that the team were constantly looking at whether the layout of the space was configured in the right way with the right layout and that there was the flexibility to change the layout provided the capital investment created a positive return.
Councillor Wickerson noted that in terms of the vacant properties, 2% were currently vacant and asked if this was a particular type of property that was causing an issue. The Assistant Director for Property and Projects explained this was mainly the office market, which, due to the last year with Covid19 had proved difficult to let and that they had needed to look at different ways to create incentives to get the units let within the office market, which was currently the biggest challenge.
Councillor Kiddle-Morris was pleased to note the increase in lets in the Business Centres both in Dereham and Thetford and was pleased to note the increase in the letting figures, particularly in Dereham and asked why Thetford was less occupied yet rendered more rent. The Assistant Director for Property and Projects explained that it came down to the valuation parameters of the geographical locations at the time of the lettings.
Councillor Eagle asked if Breckland Council were flexible with any restrictive covenants on lettable units. The Assistant Director for Property and Projects explained that if units ... view the full minutes text for item 56