Agenda item

To receive a presentation on Commercial Investment.

The committee received a presentation on Commercial Investment and noted the information received. It was noted that a Task and Finish Group will be set up to consider the details of the commercial investments and review of these investments.

Robert Orrett with the assistance of Harvey Gardner and Brendan Fisher from the Commercial Property and Investment Team gave a presentation on Commercial Investments and gave a summary of the assets held, areas of risk and asset management delivery. For somerset Council, the commercial assets comprise land with buildings or infrastructure intended to deliver income and the assets held by the previous Districts transferred to Somerset Council will now be assessed with a further report to follow.

Members were provided with an overview of capital investment and also highlighted the main asset risk areas which included tenant failure, Lease end voids, rental value changes, Capital value changes, Building depreciation and asset management delivery. The presentation also gave a short update on the Battery Energy Storage systems.

Members requested information on a number of areas including:

Net income not used as it was explained a budget cycle was needed and currently having to manually calculate, this will change in due course when data becomes available.

Assets being currently assessed and a further report will come forward; more work will be undertaken by the Task and Finish group to be set up.

Each district invested in a variety of ways and used different types of borrowing, most were short term loans although recently things had changed due to the inflation rates. It was also noted that Public Works Board had changed their rules about LAs investing out of area, however Somerset Council had come to an agreement due to the circumstances.

Members were also informed that the Executive had set up a sub-group to look at investments and assets as this was an important part of the Council`s finances and work being undertaken, they would also look at ethical investments as part of this work.

The committee were informed that the investments would require further work and investigation, that they were a long term investment and that they would be monitored through Treasury Management and all the areas would be looked at in detail within the Task and Finish Groups with the information reported back to this committee shortly. It was requested that consideration be given to bench marking with other Local Authorities.

It was requested that a written reply be provided by Robert Orrett on Voids in response to a question raised by Councillor Healey.

Resolved:

The committee received a presentation on Commercial Investment and noted the information received. It was noted that a Task and Finish Group will be set up to consider the details of the commercial investments and review of these investments.