Agenda item

Update on the Council's Property Portfolio

Minutes:

The Commission received a presentation from Robert Orrett, Service Director Property and Bob Baber, Asset Strategy Manager on the Council’s property portfolio, the management of and future plans.

                   

Highlights from the presentation;

·       The City Council is the largest landowner in Bristol, including Social Housing and Highways.

·       Land held by social housing and highways are managed by the respective departments with Property Services providing them with a valuation and support services.

·       All the Council’s property can be viewed on the following site – http://maps.bristol.gov.uk/pinpoint/

·       An outline was given on how the Property Services Division was structured and the areas of work undertaken.  The service responsibilities extended to security staff, cleaning and maintenance teams, management of the market and the harbour.  In addition the Property Services operation is concerned with buildings that deliver services   such as libraries and  public toilets, and also the Council’s land and buildings held for investment and development purposes

·       An explanation was provided on how the £3 million rental income was generated from the commercial property sector.  In most cases, Bristol Council is the freehold landowner and entitled to a fee from commercial landlords who manage the properties which is received as income to the Council.

·       The service worked hard to maximise the income or reduce the running costs of Council’s assets by selling and/or rationalising them.   The Property Service also maintains buildings that are in use; works with local community groups and partners to share or transfer property assets and also help identify future needs for property and solutions to fill gaps.

·       For the Investment portfolio, the Service is reviewing the current holdings , with an objective to:

o   Grow short term rental income by £1.5 per annum

o   Develop a formal Property Investment Policy and seek Cabinet approval to implement

o   Review Estate Management best practice and support systems in line with new policy

 

The following was noted from the discussion that followed the presentation:

 

a.     Members were concerned that property service had not met the projected income and savings targets.  Officers acknowledged that the Council’s financial management  system reports an under delivery against target.  However, the way the income and savings are presented by the financial system do not reflect the total activity or savings.   This is because not all asset rationalisation activity undertaken by Property Services is captured and credited to the headline property savings targets. For example, property disposals related to the Bristol Workplace Programme and property budgets held by other service departments do not count towards the Property Services savings targets. These savings are captured against other savings targets or initiatives outside of Property Services. .  The issue is known and work is underway with Financial Services and with the business change team to establish alternative means of accounting that properly represents the performance of the Property Services team in financial monitoring reports.

 

b.     The Property Service would continue to facilitate other directorate service areas achieve their ambitions from their property holdings but to avoid double counting these savings would not be shown against the Property Services targets.

 

c.      A question was posed on whether any consideration was given to using locally backed asset delivery vehicle agreements, which are joint ventures with commercial companies to delivery development.  It was suggested that these might provide a potential means of allowing the Council to benefit from successful developments such as the Cabot Circus retail quarter.

 

d.     Officers advised the Commission that the Council already received substantial income from developers such as this that created Cabot Circus on Council owned land. For example, income to the Council at Cabot is geared to the rental income that the developers received.  Although Cabot is a valuable site, it had been impacted by the financial failure of the economy in recent years.  Officers advised the Commission that commercial developers are able to manage risk in a way that the Council could not.   The commercial sector is able to sell and reinvest at will to manage risk. 

 

e.      Another example of a joint venture is the emerging development deal between the City Council and Bristol University at the Cattle Market. The site failed to attract any interest from developers and has been derelict for the last 18 years.  The Council obtained a grant from the DCLG that allowed for the purchase of the site and preparation of the site for perspective developers.   With the University now committed to the development and making significant investment the wider Temple Quarter and Arena area will also be impacted in a positive way.

 

f.       Members requested

 

1.     A list of buildings in Council Ownership.

2.     Details of Community Asset Transfer (CAT) Buildings

3.     Details of the rent charged and how that compared if the property was let in the commercial market.

4.     Advanced notice of any property transactions that might come to the attention of media.

                                                    i.     Action: Robert Orrett.

 

g.      The Service Director advised that it was important for any information on the concessionary value of buildings let to Third Sector organisations to be considered alongside the community benefits delivered from the buildings. 

 

h.     There was some uncertainty at the meeting about whether all Community Asset Transfers (CATs) were presented to Neighbourhood Partnerships for agreement before transfer.

 

Resolved: To note the presentation

Supporting documents: