Decision details

Tom Southall, Property & Investment Manager, presented the report for the Director of Property & Housing, which sought approval for the strategy and would ask Council for the funding from the Capital Programme to establish the £30 million fund.

Councillor Stubbs, as Cabinet Member for Planning, Regeneration & Economic Development (PRED), requested a fourth recommendation for Cabinet to receive an annual report on the performance of this fund.

Councillor Gerald Vernon-Jackson addressed the Cabinet, welcoming the report and the suggested annual report back, and hoped that there would be involvement of the opposition spokespersons for the PRED portfolio.

Councillor Donna Jones, Leader of the Council, welcomed the establishment of "Portsmouth PLC" through this strategy and investment fund, and was pleased that the Administration was proactive in the council creating its own income.  She would be working closely with Councillor Stubbs, Claire Upton-Brown and Tom Southall to ensure the swift implementation of the strategy.  Councillor Stubbs stressed that the £30m was a starting point, not a fixed sum for the investment.

DECISIONS:-

(1)  The Cabinet:

i.    Acknowledge and endorse the Investment Property Strategy 2015/16 - 2019/20 (attached as appendix 1 of the report) to be used as a guide to investments.

ii.   Empowers the Corporate Asset Development Board to recommend and reject the purchase of investments including the sanctioning of formal offers and counter offers (due to the need for timely decision making in this type of industry and the need to respond to opportunities quickly).

iii. Agrees to givedelegated authority to the Director of Property and the Director of Finance & Section 151 Officer, taking advice from the City Solicitor, and in consultation with the Leader of the City Council and the Cabinet Member for PRED, to approve the completion of investment purchases. This to be conditional upon the City Council approving the budget pursuant to recommendation (2) below.

iv. That an annual report be submitted to Cabinet summarising the activity within the Property Investment Fund including the fund's financial performance.

(2)  Cabinet RECOMMENDS to the City Council that authority is delegated to the Director of Finance and Section 151 Officer in consultation with the Leader of the Council and the Cabinet Member for PRED to:

i)             Amend the Corporate Capital Programme to create a Property Investment Fund of up to £30m financed from Prudential borrowing in 2015/16 and future years, to acquire additional investment property.

ii)             Borrow as required for investment property purchases subject to a robust financial appraisal approved by the Director of Finance & S151 Officer that meets the criteria contained within the Property Investment Strategy and has proper regard to the following:

•   The relevant capital and revenue costs and income resulting from the investment over the whole life of the asset.

•   The extent to which the investment is expected to deliver a secure ongoing income stream.

•    The level of expected return on the investment.

•    The payback period of the capital investment.