Transcript

All right, good morning, everyone. Shall we try that again? Okay, good morning. I'd like to welcome officers, and if there are any members of the public, there aren't here in the room, in attendance to the Strategic Investment Board meeting. There are no fire drills expected, so in the event of a fire alarm sounding, everyone present is asked to leave by the nearest exit and assemble in the upper car park, according to a member of the building management team. In line with our guidance on the use of social media, I'm happy for anyone attending today's meeting to use social media, provided this doesn't disturb the business of the meeting. Members, please may I remind you that this meeting is being webcast live, and it's open to the public, although I have the right to suspend filming if the need arises. Please could I ask committee members and anyone presenting to speak clearly and directly into their microphones, mobile phones to be switched off or turned to silent. Thank you. So let's go to the agenda. So let's go to the agenda. The first item on the agenda is apologies for absence, and we've received apologies from Councillor Tim Oliver. But we are still quarantined. Item two is minutes of the previous meeting, and those minutes were circulated. The meeting was actually held last year on the 13th of May 2024. Does anyone have any points to raise or can we agree the minutes? We've had some informal meetings, didn't we? Yes, that's the last formal. Are we certain about that? Yes. My absence. I think they were informal meetings. I think the meeting on the 13th of May was the last formal meeting. Okay. Okay. Okay. Agreed. Thank you. Item three. All members present are required to declare at this point in the meeting as soon as possible thereafter any disposable pecuniary interest or any other interests arising under the code of conduct in respect of any items of business being considered at this meeting. I haven't. Please. Neither have I. Okay. Nothing to declare. Thank you. Item four is questions and petitions, and we haven't received any questions or petitions, which takes us to item five, which is the main agenda item for this meeting today, which relates to Ranger House in Guildford. The sale and refurbishment of the sale and refurbishment of Ranger House. I think Natalie will introduce the sale. Over to you, Natalie. Thank you, David. This paper recommends that Surrey County Council sell an office property in Guildford, known as Ranger House, to the Surrey Property Group. Surrey County Council are keen to sell the asset so that they are not exposed to relying on third-party rental income and the associated risk of fluctuations adversely impacting on the Council's revenue budget. The proposed sale to the Surrey Property Group maximises the capital value and revenue potential of the investment property asset. It also mitigates the risk of short-term income fluctuations impacting the Council's revenue budget by way of transferring ownership to its wholly owned subsidiary property investment company. Surrey Property Group are better placed than the Council to maximize the asset management opportunities to drive rental income and enhance the capital value of the asset through landlord refurbishment works. Surrey Property Group proposed a full refurbishment project which will result in the property being more attractive to business occupiers within our County Town of Guildford, which in turn will increase the capital value of the investment once it is fully let and income-producing. Given the projected positive returns in both rental income and capital value expected following completion of the refurbishment, we believe it makes more commercial sense for our own subsidiary company to benefit, where of course all profits are returned to Surrey County Council as sole company shareholder, rather than offer the opportunity to the open market, which could result in a third-party developer benefiting from the upsides rather than ourselves. This proposal also ensures that the Council is not directly exposed to fluctuations that may impact its revenue account. Thank you. Thank you, Natalie. Charles, do you want to add anything to Natalie's report? Thank you, David. I think all I'd like to add is on behalf of the subsidiary property company, which was formerly known as Hasley Garton Property Investments and now known as the Surrey Property Group. We have, as a board, reviewed the opportunity independently and we are very comfortable to accept the transfer to SPG, because we believe that following the refurbishment works based upon advice from our independent valuer, that once the property is fully let and income-producing, that there will be a significant capital profit as a result of the works, and which will be of benefit to SPG as a company and also to our 100% shareholder in terms of Surrey County Council. And just in terms of a non-monetary matter, I also believe it is a fantastic opportunity for SPG and for our shareholder to improve property within our county boundaries, which in turn will drive new business and hopefully incubate new business, new tenants into Guildford, which of course is the gaming hub of the UK, and we look forward to doing that and having a fully let property. So thank you. I'm very happy to answer any detailed questions on the finances, but perhaps that would be better in part two. We do have part two to go through some of the more confidential financing stuff and I suggest we leave that discussion there. I just wonder whether you'd like to comment a bit on the, there were five options considered, weren't there, in terms of the possible refurbishment. But there's anything you want to add in terms of those options that were looked at and the recommendation that's come forward, which is basically to do the maximum option for, I think. I would certainly recommend the, the do maximum option. I would say it's do maximum with a cautious hat upon it, insomuch it's a focus on the mechanical and engineering works of the M&E in the building, which is in a very poor state of affairs. And it is a good level of refurbishment to the common parts. It's also introducing showers to enable the cyclists to be able to change when they come in. So there's an element of the sustainability side. And we also desperately need to increase the building's EPC rating from an E to as high as we can get it, from the point of view of sustainability going forward. So I do believe that that is the right course of action. It also gives the widest opportunity to attract the most amount of tenants in what is still a difficult leasing market. But if we are offering one of the best products in the county town of Guildford, I, you know, I think it gives us absolutely the best opportunity to de-risk the works, the cost of the works that we're suggesting. I would just mention that, of course, we have put a figure of those cost of the works in. That is subject to formal tenders. We actually received tenders back from three organizations on Friday. I think my consultant hasn't yet had a time to analyze. But I would say we don't anticipate it being more than that. But it is an estimate at this moment in time. Okay. Thank you. Rachel. I just wondered whether Simon as the Executive Director might want to say anything as well, obviously from the Council's perspective, but that might be better for part two. Simon, is there anything you want to add at this point? I'll leave it for part two. I can't hear you. I think you're on mute. No? Well, I can hear you, Simon. I don't know. Can you hear us in the room? We can hear you, Andy. Yep. I can hear Simon. Go on. Yeah, thank you. Sorry, Chair. Yeah, I was just saying very little to add other than to say on behalf of Surrey that we echo the points that this disposal is a good strategic fit for both Surrey and the holding company, and any further details we can pick up under part two. Thank you. Okay. Thank you. All right. Part two. Part two. Natalie, anything further? Okay. So there's four recommendations in front of us. Huma, can we take these all together? So, recommended the Strategic Investment Board. One approves the sale of Ranger House to Surrey Property Group, previously known as House of Garton Property Limited, in accordance with the Red Book Valuation, dated 29 January 25, and delegated authority to be given to the Section 151 Officer to agree that amount. Number two. Approves the provision of a loan by the Council to Surrey Property Group, secured against the Ranger House property, to partly fund SPG's purchase and redevelopment of the property. Delegated authority to be given to the 151 Officer to agree the loan details. Number three. Gives the SPG Board delegated authority to proceed with required refurbishment works, to provide suitable accommodation to lease out to third parties for the purpose of maximizing income, for revenue generation purposes and maximizing capital value of the asset once it's fully let. And number four. Notes that all of the above are subject to separate agreement by SPG Board in accordance with its own governance. So they're the four recommendations. Are we all happy to accept those? Agreed. Agreed. Good. Thank you very much. So that then takes us to item six. So the part one part of the meeting is complete. And we move to item six. And the exclusion of the public. And that under section 100A of the Local Government Act 1972, the public be excluded from the meeting during consideration of the following items of business and the grounds that they involve the likely disclosure of exempt information under the relevant paragraphs of part one of schedule 12A of the Act. So can we have confirmation that the webcast has now...