Agenda item

To update the panel on progress of the renovation and marketing of industrial units(report of the Assistant Director – General Fund Assets enclosed).

Consideration was given to the report of the Assistant Director – General Fund Assets to update the panel on the progress of renovation and marketing of industrial units.

The Strategic Property Manager introduced the report by stating that a rent review had been implemented which had led to lease renewals and negotiations regarding rent increases and service charges. Outcomes and actions which arose from the review were outlined at point 2 of the report.

Members considered the report and made the following comments:

• Members stated that the purpose of the original leases was for the provision of business starter units, which therefore offered employment opportunities, rather than being used as storage units. Had the terms of use changed over the years?
  • The Strategic Property Manager responded that:
    • the current focus had not been to lease units solely for the purpose of providing business starter units;
    • businesses were encouraged to grow however there was a lack of larger units for businesses to relocate to;
    • historically, the units had been under-rented;
    • until recently service charges had not been made which had led to maintenance issues – this had now been rectified; and
    • whilst the council could not influence a change with a current tenant, employment based firms were always prioritised against storage facilities. 

• Members were encouraged by the waiting lists for units across the district.

• Members referred to point 5.4.1 of the report and asked for clarification of the legal implications and whether tenants were offered the same terms across the estate.
  • The Strategic Property Manager responded that:
    • rolled-over leases applied in the cases mentioned at point 5.4.1 were subject to the Landlord and Tenant Act 1954;
    • the tenants had disputed the implementation of the new service charge and rent increase however negotiations were in place; and
    • the aim was to align lease agreements for consistent estate management.

• Members referred to the waiting lists and asked whether information was shared with the Growth team to identify opportunities.
  • The Estates Manager responded that regular contact was made to ensure those on the waiting list were still actively looking for premises. Where the requirement for a shop unit was identified, these were referred to the Growth team.

• Members referred to the arrears at points 2.6 to 2.8 of the report, and asked whether historical arrears were being paid or if legal action had taken place?
  • The Estates Officer confirmed that payment plans were either already in place or being sought.

• Regarding the lack of general maintenance, as stated at point 2.10, members were surprised that the services of a general maintenance person had not been secured.
  • The Estates Officer concurred, however the lack of interest had subsequently been attributed to an uncompetitive rate of pay.

• Members asked for assurance that the rent arrears process would be improved.
  • The Estates Officer was relatively new in post and, as a previous Lettings Manager, was accustomed to chasing arears. Regular contact was maintained with tenants and Credit Control to ensure that arrears were kept to a minimum.

• Members referred to the current financial crisis and questioned whether increased rents were viable.
  • The Strategic Property Manager stated that:
    • the rent review was deemed fair and reasonable;
    • rents had not previously been regularly reviewed and were cheap in comparison with the market;
    • each estate was visited regularly, and any issues dealt with swiftly and effectively.

AGREED:

That the Marketing/Renovation of Industrial Units report be noted by the Performance Monitoring Panel.