Agenda item

Report of the Director of Planning and Property attached.

Decision Made: (Unanimously)

That:

(1)    the Investment Property Strategy as set out in Appendix A of the report be approved; and

(2)    Delegate the final approval to invest on LSHIM’s recommendation to Section 151 Officer and Corporate Property Officer in conjunction with the Portfolio Holder.

(3)  it be noted that two further complementary Investment Strategies were being developed to support Economic Development / Regeneration and Housing and would be considered at a future Cabinet meeting.

Further to Minute No. 57 of the meeting held on 6 December 2017, the Cabinet considered the report of the Director of Planning and Property which provided details of the revised Investment Property Strategy which had been produced following meetings with the Council’s appointed advisers Lambert Smith Hampton Investment Management (LSHIM). This report set out the investment matrix and the ground rules for LSHIM to find appropriate investments to meet the Council’s aims.

An amendment to the report was submitted at the meeting to delegate the final approval to invest on any LSHIM’s recommendations to the Section 151 Officer and Corporate Property Officer in consultation with the Cabinet Member for Assets and Transformation. The approval of any such investments would also involve the Cabinet Member for Finance.

Details on the development of two further complementary Investment Strategies, to support Economic Development/Regeneration and Housing were also provided within the report.

During the debate, Cabinet raised the following issues:

Although the Strategy presented last year had forecasted a target net annual shield of 5-8%, Members noted the target reduction of 4.5%. It was accepted that the rate of return has dropped from what was originally earmarked. This was primarily due to changes in the markets, particularly in relation to the retail sector.

The aim was to invest in long term investments in the context of the Treasury Management process, being mindful that investment was considered better than raising the Council’s level of balances. There was a general consensus that the authority needed to make its reserves work more effectively.

Decision Made: (Unanimously)

That:

(1)       the Investment Property Strategy as set out in Appendix A of the report be approved; and

(2)           Delegate the final approval to invest on LSHIM’s recommendation to Section 151 Officer and Corporate Property Officer in conjunction with the Cabinet Member (Assets and Transformation).

(3)       it be noted that two further complementary Investment Strategies were being developed to support Economic Development / Regeneration and Housing and would be considered at a future Cabinet meeting.

Reasons for Decision:

The Council identified investment in commercial property as an opportunity to increase its income whilst protecting its capital in its Budget for 2017/18. An Investment Strategy and appropriate governance framework was developed and agreed at the Cabinet meeting on 6 December 2017. At that meeting it was agreed to procure specialist advice and LSHIM were subsequently properly procured and appointed in March 2018.

LSHIM met with Council officers to establish a common understanding of the opportunities that could be available and the practical challenges that would need to be addressed to meet the potentially tight timescales for decisions. On 25 April 2018, the Managing Director of LSHIM, held workshops at the Civic Centre with Members of the Cabinet and the Asset Working Group outlining the staged approach to identifying and selecting investment opportunities. The Investment Strategy had been revised following those workshops and identified potential opportunities and progression to investment

Alternative Options Considered and Rejected: 

This was one investment strategy identified for sustainable income. Other investment opportunities have been identified and funded through the Council’s 5 year Capital Strategy.