Meeting documents

For Members to consider the attached report.

Contact officer: Andrew Small 01296 585006

AVDC and the Akeman Partnership LLP (Akeman) set up AVE as a Limited Liability Partnership (LLP) in October 2009. AVE was created to manage, improve and develop AVDC’s commercial property portfolio. The Partnership was governed by a Partnership Board which contained three representatives from AVDC: currently Cllr Warren Whyte, Cllr Julie Ward and Teresa Lane (Assistant Director Commercial Property and Regeneration). The Board met on a regular basis to review progress against the original objectives and Business Plan and monitor performance of the appointed Asset Managers. Since AVE’s establishment, it had been agreed that the Business Plan would go through Scrutiny and Cabinet annually. The item was attended by Graham Cole, Philip Ingman and Ed Inder of Akeman Asset Management, and they discussed various elements of the Plan. Highlights included the occupied rate being almost 100% which had led to a gradual rates increase of around 25% over the last two years. The success of the Rabans Lane site was contrasted by the struggling retail market in Hale Leys. Boots had been retained and a new lease had been signed for the vacant Poundworld unit; the new leaseholder would open from February 2019.

A copy of the draft Business Plan covering the period 2019 – 2022 had been circulated as part of the confidential section of the Scrutiny agenda. Included in the report were appendices covering cash flows for AVE and Hale Leys. Members were provided a summary of key issues within the Business Plan which were split into various categories: Distributions, Asset management initiatives/developments, Occupancy levels and Key performance targets. The core aims from 1 April 2019 were also outlined.

The Committee were asked to note that in order to reflect any consequences of the AVE Business Plan in the 2019/20 AVDC budget setting, the timing of the report meant that the plan could only review performance of the 18/19 Business Plan for the period 1 April – 30 September 2018. A full review of the 2018/19 performance was expected to be reported to the 2019 Scrutiny and Cabinet meetings.

Members had questions on the Plan and the portfolio and were advised that:-

      i.        Various options were being considered for the vacant units in Hale Leys which included the possibility of ‘splitting’ two floored units and sectors beyond retail. The position of M&S continued to have a positive impact on the footfall of Hale Leys.

     ii.        The AVDC Masterplan for Exchange Street would only go so far in having a positive impact high street retail.

    iii.        AVE felt they had achieved many of the objectives that had been set when it was established nine years ago and gave examples to support this.

   iv.        Planned site sales were expected to go through subject to the planning process. Members then asked for more information about where funds would be spent following these disposals.

    v.        Positive working relationships had been cultivated with tenants which had helped with the lease renewal process. These relationships could also lead to payment plans being established should a business be facing a temporary shortfall. A small number of businesses had payment plans set up.

   vi.        The recent unitary announcement had been unexpected to AVE and left the need for legalities to be quantified in future. AVE representatives had experienced a similar situation when working with Primary Health Trusts.

  vii.        The estimated 25% increase in rental rates was not a blanket statistic across the portfolio and, instead, was relevant to smaller units.

Members were asked for their comments related to the plan for Cabinet to consider on 16 January 2019. Whilst the Committee were encouraged that AVE were effective at collecting rents and dividends were expected to be returned to AVDC over the next two years, concern was expressed over proposed site disposals and the Business Plan’s over reliance on these disposal receipts within the Financial Model. On balance, Members felt that disposals may be due to the demand for dividends being paid and that once a site was disposed it was permanently off the portfolio. The Committee were also concerned about strategic work regarding Hale Leys. Specifically, Members had hoped to hear more ideas on how Hale Leys could adapt in the national struggle in the retail market and what AVE’s objectives were for the centre.

RESOLVED –

That the Committee’s comments and concerns be referred to Cabinet when they consider the AVE Business Plan 2019/2022. Members also thanked representatives from AVE for attending.

Note:

Councillor W. Whyte declared a personal interest in the above item as one of the Council’s representatives on the AVE Board. Councillor Whyte left the room when Members considered their comments to be referred to Cabinet.