Purpose

On 6 February 2024 Cabinet authorised the
Executive Director for Growth and Regeneration in consultation with
the Deputy Mayor/Cabinet Member Finance, Governance and Performance
and S151 Officer to dispose of the Councils freehold interest in
Hengrove Leisure Park for £1 (peppercorn).

The Council is the freehold owner of Hengrove Leisure Park and
granted a 999 year headlease to Sun Life Assurance in October 1996
on a peppercorn rent. The Council took a 998 year sublease of the
adjoining children’s play park and are obligated to pay an
annual service charge. Sun Life subsequently sold the headlease to
AEW.

The site has declined as a leisure park destination for several
years with the closure of key occupiers including Buzz Bingo and
Cineworld.

AEW secured outline planning consent reference 21/00531/P (granted
14 March 2022) for demolition and residential redevelopment
comprising 350 homes including 30% affordable (77% social rented
units and 23% shared ownership) and up to 1,650sqm of flexible
Class E uses, of which 150sqm is also Sui Generis (Hot Food
Takeaway), along with cycle accesses, parking, servicing,
landscaping, public realm, and associated works. Reserved matters
have been submitted with a signed Section 106.

The long leasehold interest is to be acquired by Keepmoat together
with the Council’s freehold interest to facilitate the
residential led development. The freehold is essential for several
reasons namely:
• There are increasing practical complexities associated with
the disposal of houses on a long leasehold basis (particularly with
mortgage lenders)
• A lease is not compatible with Homes England’s shared
ownership model
• Funding
The Council has worked closely with all parties and a legal
structure has been agreed that aligns the objectives of delivering
the overall development in accordance with planning consent. The
sale of the freehold will also be linked to the removal of the
annual service charge liability.
An independent red book market valuation has confirmed a disposal
at undervalue at a level authorised under the scheme of
delegations.

Content

Decision to dispose of the Councils freehold
of Hengrove Leisure Park, Hengrove Way in accordance with the terms
of the agreed legal structure.

Alternative options considered

Delivering the development within the existing
long lease structure was considered but increasing complexities
associated with the disposal of residential including affordable on
a long leasehold basis (including Homes England shared ownership
model) and funding requirements means this is not practicable and
would significantly impact overall delivery.