Ashford Borough Council's Corporate Property portfolio continues to provide significant incomePublished: 25/09/2020
The annual review of corporate property assets owned by Ashford Borough Council shows they have generated significant income for the authority, while acknowledging that the current uncertainty caused by the Coronavirus pandemic is likely to have an adverse impact on future returns.
The report presented to Cabinet last night (24 Sept) examined the revenue performance of the corporate property portfolio during the 12 months up to 31 March 2020. It underlined that the considerable income from its commercial property portfolio helps to support the council’s budget and the services it provides.
The surplus for this period (before internal recharges) is £2.41m on a total income of £5m. This surplus is around £550,000 higher than the previous year thanks to an increase in income from more recently acquired assets and reduced liabilities in older assets.
Increased income came from higher rents in Elwick Place as 2019/20 saw the first full year of operation, plus the acquisition of the Matalan site.
Cabinet heard of steps taken to maintain or improve the revenue performance, including the adoption of an asset management strategy to ensure the council invests prudently, achieves long term value for money, meets the needs of customers and supports the authority’s carbon neutrality objectives.
Details were provided on the revenue performance of around 2,000 assets, including Elwick Place, Park Mall, International House, Carlton Road Business Park and the Commercial Quarter. Updates were also given on progress made in securing new tenants and maximising the returns on all assets.
Councillors heard that due to the unparalleled events of the past 18 months such as the collapse in the retail shopping market, the impact and uncertainty of Brexit and the Coronavirus pandemic it was also necessary to consider what impacts these events may have on the council’s property portfolio in the short term.
Therefore the council is reviewing its extensive corporate property portfolio and will be considering opportunities to dispose of assets which will assist with the replenishment of its capital reserves, which will not detrimentally effect the running of the council.
Cabinet noted the revenue performance of its corporate property portfolio up to 31 March 2020; noted the risk assessment in relation to the future income from its assets in light of the COVID-19 pandemic; and approved a clarification added to the Property Acquisition, Investment and Disposal Strategy that places a financial restraint on the value of the disposal of assets.
Cllr Paul Clokie, portfolio holder for corporate Property and Projects, said: “We have to accept that because of COVID, the council will face rental income reductions, however officers are working hard to reduce the potential impact on the authority’s finances.”
About ABC Corporate Property
The council’s Corporate Property team deals with the management of all non-residential property assets. Corporate Property consists of operational properties and non-operational properties.
Operational properties – Directly used to support council service delivery and those operated by partner organisations.
Non-operational properties – Used to enable the council to support community and business and provide the council with a revenue stream. This includes surplus assets for disposal to support capital projects and strategic development land.