Conrad Hall, the Corporate Director of Resources at Newham Council, has approved the sale of 27 commercial and industrial properties owned by the council. The decision to sell these properties was initially made at two cabinet meetings earlier in 2024, one in February and one in May, in order to raise funds to balance the council's budget.

Disposals

The properties to be sold are listed below:

• 197 Upton Lane, E9
• 197-205 Leytonstone Road, E15
• Land at Alan Hocken Way, E15
• B&G 375-377 High Street, Stratford
• 399-401 High Street, Stratford, E15
• 403-405a High Street, Stratford, E15
• 405b High Street, Stratford, E15
• 407-409 High Street, Stratford, E15
• 411 High Street, Stratford, E15
• 415-417 High Street, Stratford, E15
• 197 Freemasons Road, E16
• 5 Henrietta Street / 160 Leyton Road, E15
• Thornham Grove, Stratford, ED15
• LMK, 29 Bidder Street, E16
• Caxton Street, Canning Town, E16
• Brunel Street / Shirley Street, E16
• Greenshields Industrial Estate, E16
• 317-325 High Street, Stratford
• 55 Napier Works, E6
• 1 Beeby Road and 201-205 Freemasons Road, ED16
• 190-192 Leyton Road, E15
• 207-215 Leytonstone Road, E15
• 728 Romford Road, E12
• 119-123 Freemasons Road, E16
• Powerday, 32 Stephenson Street, E16
• 242 Fernhill Street, E16
• 55 Hallsville Road, E16
• 60-68 Leyton Road, E15
• 1 Bidder Street, E16
• 122 Colworth Road, E11

Rationale for disposals

The February cabinet report on the proposed disposals explained that the council is facing pressure from increased demand across services, particularly adult social care, children and young people’s services and temporary accommodation, at the same time that inflationary pressures and rising interest rates are impacting the council's ability to deliver capital projects like housing delivery. To mitigate against these budget pressures, the council is looking to raise funds by selling properties judged to be non-strategic because they meet at least one of the following criteria:

• The property doesn't adjoin other council-owned land or property, meaning there is no potential to redevelop them as part of a larger scheme.
• Selling the property would not impact regeneration plans or the implementation of other council policies and priorities.
• The council has little or no short or medium term control of the use or occupation of the property, normally because they are subject to a lease of more than 10 years.

The report to the May Cabinet meeting, which focused on the disposal of industrial properties, explained the council's reasoning in greater detail.

The assets in this Report are predominantly let on long leases at low rent. The existing lease arrangements on these sites make the prospect of investment, redevelopment or intensification of the current use challenging. Many are underused and in need of rejuvenation.

The proposals enable the Council to merge the freehold with the long leasehold interest creating the opportunity for third party investment in the asset, producing a better offer to Newham residents and delivering the Council a capital receipt.

Alternative options

The reports considered a number of alternative options to the proposed programme of disposals:

1. Prioritising sales based on criteria other than financial considerations, such as keeping properties in the borough, or keeping properties of certain types, such as retail or industrial. This was rejected because it would result in a lower financial return from the disposals programme.
2. Prioritising the sale of freehold interests where the council had previously sold a long lease, allowing the leaseholder to invest in the property. This was rejected on the grounds that the disposals in the first phase of the programme are too insignificant in comparison to the council's total holdings to impact the council's wider property strategy.

The report acknowledges that these are both realistic and very reasonable alternatives which should be given consideration, but argues that the proposed approach is preferable in this instance.

Timescales

It is anticipated that the sales will be completed during the 2024/25 financial year, although the reports acknowledge that the current weak property market may require a reasonable period to ensure that the council receives the best consideration reasonably obtainable. The reports also warn that there is always risk assets identified for disposal may not sell due to market appetite or transactional difficulties.

If any of the properties cannot be sold, they will be substituted with other properties to ensure that the council meets its disposals target.