Agenda item

This report provides an overview of the current position in relation to property rents in Watford for 2014/15.

The Panel received a report of the Shared Director of Finance and the Regeneration and Property Section Head.  The Regeneration and Property Section Head highlighted some of the key elements of the report.

Following a question from Councillor Collett about incentives, the Regeneration and Property Section Head explained that there were various incentives that may be granted.  A company could be offered a rent free period for a new tenancy or be given capital contributions towards fitting out the premises.  He added that if the Council did not quickly lease premises there would be an impact on business rates. 

The Chair referred to the table setting out occupancy rates for units.  He said that he had understood that the majority of businesses had moved from Cardiff Road, although the table indicated that there were only three vacant units.

The Regeneration and Property Section Head advised that he would check the accuracy of the information and report back to Members.

The Chair noted the risk matrix, paragraph 7.1 of the report, was incorrect.  Councillor Taylor requested further clarification of the final risk in the table and the reference to a disposal strategy.

The Regeneration and Property Section Head informed Members that the Property Review considered how all properties in the Council’s portfolio performed, benchmarking them against national criteria.  Part of the review looked at how intensively properties were managed.  The aim of the disposal strategy would be to consider whether the property portfolio could be improved by replacing properties with more profitable ones.  He stated that a report would be presented to Leadership Team in November.  With operational properties it would be necessary to consider if there were more effective ways of working with the space available. 

The Portfolio Holder suggested that the Council may decide to dispose of those properties which were not high earners.  He noted the risk matrix and considered the ‘likelihood’ should probably be two and not three.  Non-performing properties could be a threat to the Council’s overall budget.

The Regeneration and Property Section Head said that if the Council did sell some properties it would receive a capital receipt.  He did not envisage this being spent immediately and there would be some reduced income received until the receipt was reinvested, however the timing of sales was in the Council’s control. 

The Portfolio Holder considered it to be a positive position if the Council received a capital receipt from any sale.

The Chair informed the Panel that the Property Task Group would be meeting towards the end of November to discuss the consultant’s report.  The Task Group would be able to discuss the issues raised at this meeting. 

Councillor Derbyshire noted the potential sale of lower performing properties and asked how the Council would consider investing its money, for example in property or financial investments.

The Shared Director of Finance responded that the assumption would be to reinvest in property, as this was currently a better investment.  The Council had options where it wished to spend its resources.  There was no proposal to ringfence the funds.

Councillor Collett suggested that due to the current housing situation it might be an idea to invest in temporary accommodation.

The Portfolio Holder said that it would be important to reinvest funds which in turn would enable other things to happen.

The Shared Director of Finance stated that from a financial point of view it was important to invest in places with the highest rate of return.  This would then enable the Council to do some of the work it wanted to do elsewhere.

The Regeneration and Property Section Head added that the Council could look at regeneration areas.

In response to a question from the Chair, the Regeneration and Property Section Head stated the investment portfolio was worth in the region of £105 million, plus or minus 5% or 10%.  The operational portfolio, which included the Town Hall, was in the region of £40 million.

The Chair thanked everyone for their contribution to the discussion.