Commercial Estate Strategic Review
Cushman & Wakefield was appointed by North East Lincolnshire Council (NELC) to undertake a strategic review of the Council’s key assets within its commercial (non-operational) estate. These comprised 284 separate interests generating £1.6m of income for the Council across a broad range of asset types.
The aim of the review was to identify areas where the Council could improve performance and, in particular, how it could generate a greater level of income when compared to current arrangements.
There was a particular emphasis recognised by Cushman & Wakefield, that even given the budgetary environment NELC faced, there were often strategic, socio-economic or asset management justifications for the holding of many of the Council’s commercial assets so more innovative solutions were sought, as opposed to developing a disposal strategy.
The review’s principal aim was to identify areas where performance could be improved through asset management opportunities, lease re-gears and specifically ways in which the Council’s extensive ground lease assets could be enhanced. This included ways in which the Council could re-engineer existing tenure arrangements, including negotiating lease extensions with tenants, conversion of ground leases onto a ‘rack-rented’ basis or for the Council to take a more active role in redevelopment.
Cushman & Wakefield undertook a high level portfolio review of NELC’s commercial portfolio, which led to the prioritisation of a number of assets. The review comprised a number of key elements including data collation, portfolio analysis, performance assessment, asset categorisation, key recommendations and next steps. The recommendations were based on those asset groups that generated the highest amount of income, namely a number of leisure premises and industrial estates. Recommendations were made involving overall estate management and performance such as disposing of ‘unsatisfactory’ properties, recycling of capital, becoming involved in direct investment as well as specific alternative approaches and delivery mechanisms available to the Council.
Cushman & Wakefield also provided advice in regards to business rates retention, a regime promoting clear opportunities for councils to become more involved in development
The report was discussed at senior management level, alongside a presentation of findings and recommendations. Financial modelling illustrated next step recommendations to ensure ownership and endorsement by the Council.