The Strategic Investment Board met to discuss the future of several property assets owned by Surrey County Council. The board agreed to dispose of all remaining properties owned by Halsey Garton Residential (HGR) and dissolve the company once the sales are complete. They also agreed to review investment and non-operational leased out properties directly owned by the council on a case-by-case basis.

Halsey Garton Residential (HGR) Strategy Update

The board approved the strategy update for HGR, a wholly owned Local Authority Trading Company (LATCO). The decision was made because all assets are now considered surplus to requirements for the delivery of council policy. As a result, the council will extinguish the long leasehold interest to HGR and dispose of the freehold of the assets. Once all assets are disposed of, HGR will be dissolved, and any remaining premium payments will be returned to the shareholder as a dividend.

The council had previously provided funding to HGR for the purchase of 40-year long leaseholds on 80 residential properties in or bordering Surrey. These properties have been leased out on Assured Shorthold Tenancies¹. The asset value of the long leaseholds was £21.1 million as of March 2025, with an average long leasehold period of 36 years remaining.

The council's decision to dispose of these assets was influenced by several factors, including low forecast returns and the potential negative impact of central government legislation, such as the Renters Reform Bill². Councillor Natalie Bramhall, Cabinet Member for Property, Waste and Infrastructure, highlighted the importance of responsible management during the disposal process, stating that HGR would always act as a responsible landlord.

Councillor Tim Oliver OBE, Leader of the Council, suggested that the district and borough councils be approached to see if they had any interest in acquiring the properties for housing stock, particularly for key workers. Councillor Natalie Bramhall, Cabinet Member for Property, Waste and Infrastructure, confirmed that district and borough councils would be made aware of the properties, but noted that there had been no interest from them so far.

Investment and Non-Operational Leased Out Properties

The board approved a case-by-case review of investment and non-operational leased out properties directly owned by the council. They also noted the decision taken by the Shareholder Investment Panel (SHIP) to agree to a tenant's early lease surrender at Park Lodge.

The council currently owns several investment and non-operational leased out properties that are not within a subsidiary company. As of March 2025, the value of these assets was £67.3 million. These assets were originally purchased or developed individually with a view to potential operational requirement, but for various reasons have not been required for operational use. One asset, Brightwells, was acquired in 2024 for the purpose of regeneration in Farnham.

The review will consider current operational requirements for each asset, potential future changes resulting from Local Government Reorganisation[^4], the timing of individual disposals, and support for regeneration of an area where applicable. Option appraisals will be undertaken on three key assets, and the recommendations will be brought to the Strategic Investment Board on 28 July. Any property identified for disposal will be marketed from September, following the summer recess.

Surrey Property Group (SPG) Business Plan 2025/26

The board reviewed and approved the SPG business plan, which had been prepared by the company and reviewed by the Shareholder Investment Panel (SHIP).

SPG purchased 17 commercial property assets between November 2015 and December 2018, to lease to tenants and generate rental income. As of March 2025, SPG has property assets valued at £232.4 million. The strategy for SPG is to retain existing assets that are forecast to deliver long-term and secure income with minimum volatility. Underperforming assets may be divested to maximise portfolio performance.

During the year, an office building in Guildford called Ranger House will be transferred to SPG. This transaction has been approved by the Strategic Investment Board and is intended to place the asset in the council's specialist investment property subsidiary in advance of refurbishment and re-letting.

Extensive redevelopment works have been completed at the former Debenhams in Winchester. The ground floor is now fully let to Nando's, Pizza Express, and Five Guys. Marketing of the upper floors has recently commenced, and good interest has been received from several leisure operators.