Agenda and minutes

To receive any apologies for absence and declarations of interest.

Apologies for lateness were given by Councillor Gregory.

There were no declarations of interest.

Introductions were given by all.

To consider the minutes of the previous meeting.

The minutes of the previous meeting were approved as a correct record.

Councillor Criscione apologised for not sending formal apologies to the previous meeting.

Councillor Sell requested that thanks be given to the outgoing members of the board, following May’s Local Elections.

Members requested that officers look to arrange future meetings at Little Canfield and Chesterford Research Park, subject to agreement from the Chair. The Director of Finance and Corporate Services also offered all members a tour around Chesterford Research Park.

Councillor Gregory arrived at 18:15

To consider the process for establishing the value of the UDC asset portfolio.

The Director of Finance and Corporate Services provided an introduction to the process of establishing the value of the Council’s asset portfolio.

In response to questions from members, officers confirmed that the approach to making the valuation was a standardised process used by CBRE and consistent with that used by Aviva and Aspire to allow for a direct comparison.

They explained that Local Authority accounts needed to provide a “fair value” on a commercial asset; given that the assets were a revenue income stream and not a driver of capital growth.

To receive the Uttlesford Property Portfolio Quarter 4 report.

The Director of Finance and Corporate Service presented the report on the Uttlesford Property Portfolio for Quarter 4 of the 2022/23 year.

The Board discussed the Portfolio in-depth, and the following comments were made:

Chesterford Research Park (CRP)

·         Park staff had regular meetings with the tenants of the CRP and would support them to find solutions if they were found to be in financial trouble.

·         Recent market research showed that there was a need for over one million square foot of lab space in and around Cambridge. Previously, officers sought to expand CRP one project at a time, but this was not quick enough to keep up with the demand of the industry. Therefore, officers were planning ahead to produce more buildings but due to the rapid nature of the expansion of the industry, many of the companies which would occupy them did not exist yet.

·         Middle-sized units were a safer investment as they could be adapted either by dividing them up or by combining them together. A bigger build required more commitment from the tenants.

·         As far as the Council Portfolio was concerned the ‘asset’ was the loan which the company makes repayments on each year. It was set at 50 years but had an immediate recall clause should it be the wish of the Investment Board to terminate the agreement. 

·         Aviva and UDC had a vote each on the board. Should there be a split vote, representatives of both organisations would meet to come to a resolution. There had not been any dispute so far, as both shared the same beliefs.

·         The Loan to Aspire was required to be set at a market competitive rate. Should the Council wish to sell their shares in Aspire, then they would be required to pay capital gains tax.

Other Assets

·         The majority of the tenants had rent guarantors, usually in the form of their parent companies.

·         Tenant reputation was considered a risk to the Council; therefore, any concerns would be brought to the Investment Board as they arise.

·         The valuation of an asset was subjective at any given time, as it was a reflection of the market at that point. For example when acquiring the Waitrose Distribution Centre, it was found to be located just outside of the desirable area from logistical assets, yet it has now moved into this area and was therefore deemed more valuable.

·         The Waitrose Distribution Centre was the first example of an increased rental yield. Officers explained that the rent had risen between 2% and 5% each year, but this would not be applied until the end of a 5 year period.

·         Phase Two of Stanes Park was complete, and the new units were all occupied. Churchmanor were looking to sell the remaining 48% of the Park which was still under their ownership and the Council had the right to first refusal. Due to the cost of borrowing, officers had chosen not to pursue this offer further and the offer has now expired.

·         Amazon  ...  view the full minutes text for item IB

To consider the recent findings from Government reviews of commercial investments at Thurrock Borough Council and Woking Borough Council.

The Director of Finance and Corporate Services introduced the report on the recent findings from Government reviews of commercial investments at Thurrock Borough Council and Woking Borough Council.

Members discussed potential approaches to reviewing the findings and it was agreed that a member-only session be convened with the Independent Person also in attendance.

Cllr Bagnall left at 20:05

Meeting ended at 20:13