Agenda item

To set out the methodology for using commercial agents to provide targeted and additional resource to support the letting and management of commercial property (Report of the Interim Property Asset Services Manager enclosed)

Consideration was given to the report of the Interim Property Asset Services Manager setting out the rationale and methodology for using external letting agents to provide targeted and additional resource to support the letting of vacant industrial units. In addition, the use of external commercial property resource to support the Council with the management of its five industrial estates. .

Members considered the update and the following issues were

raised:

• The Chairman suggested that Parish Council notice boards be utilised to display the availability of locally available vacant industrial units. The Executive Manager – Property & Development welcomed this suggestion and would look how best to take this forward as units become available.
• The Chairman commented on the marketing process flow-chart regarding the notice given and process when a let property was about to become vacant in particular how officers plan to deal with ensuring the unit is returned in a decent condition ready for a new tenant.  The Executive Manager Property & Development advised that the process would typically be an inspection around 2months prior to the end of the lease, a schedule prepared and served on the tenant confirming works needing to be done and then close to the end of the lease a further inspection to determine whether this had been completed. In the event that it hadn’t the tenant on vacation would be recharged for the works outstanding.  It was confirmed that this would be covered in a new standard form of lease and noted in the new Lettings Policy. The Chairman commented that this was welcome news regarding the new agreements, however the arrangements for vacating under the existing and hence older style agreements needed to be monitored effectively.
• Members raised concerns regarding industrial units being used for storage rather than for businesses use. The Executive Manager – Property & Development confirmed that he was already aware of this concern and was monitoring proposed new lettings closely. Under the proposed new Lettings Policy officers will be given greater flexibility to let to a wider range of uses and consider a range of matters that would ensure that the right uses for what are effectively business use units. However it was important to note that the Council relied on the income from these units and if storage was the only potential letting use at that time this would need to be taken into account.

·         Members asked whether Covid-19 has affected lettings or tenants’ ability to pay rent, and were advised that thanks to the availability of grants administered by the Council and regular communications with tenants, there has been so far very little apparent impact.

• Members asked whether there were opportunities to regain properties if tenants were not adhering to the letting agreement criteria, and were advised that the new lease agreement would specifically deal with this. Through effective estate management, new lease terms and by building good working relations with tenants the Council was looking to have effectively managed and operated estates.
• Members commented on whether the ability to let units had reduced as a consequence of the pandemic and were advised that  although the current valuation work conducted had not indicated change in values compared to the beginning of the year,  it was still too early to tell what the true impact of the pandemic would be on future lettings and income levels. 
• There was also no indication of lack of interest in the units, and tenants had generally not fed back any concerns about their future occupation.  Members requested an update regarding additional industrial units planned for Crease Drove in Crowland. They also expressed disappointment at the development fronting the Council’s Pinnacle Close estate appearing to be more of a retail offer rather than industrial and asked whether the Council, as adjacent landowner, had any control over this.  Members were advised that there was c15,000 square feet of new build industrial space at Crease Drove for which the Council had secured planning consent however the process for procuring a building contractor was paused pending more certainty on the ability to let these units once built.  It was noted that Asset Officers were working with their Inward Investment colleagues to determine next steps. On the matter of the Pinnacle Close frontage unit the Executive Manager – Property & Development confirmed that this site was not in the ownership of the Council so other than through the planning process had no control over how that site came forward for development and its use.

AGREED:

That the contents of the report be noted.