Purpose

Lambeth Smith Hampton and Savills were
appointed in late 2019 as joint selling agents for the Eastern
Gateway site following an open tender process. Their appointments
were documented by way of letters of appointment and this
arrangement has continued since. The appointments now need to be
renewed and, for the reasons set out below, it is proposed to
re-appoint them on similar terms for a further period of 24 months
by way of procurement compliant call-off contracts from the CCS
Framework.
 
The existing appointments provide for fees of
between 0.4% to 0.7% per agent (depending on the area being sold)
of the contracted selling price for freehold sales. For leasehold
disposals, the fee is 5.75% per agent of the contracted annual
rent. All fees are only due upon a successful sale or letting and
the agreed rates are considered competitive.
 
To date, the agents have been paid for the
disposals to LDH and Amazon. They will also be entitled to fees
upon the completion of the current plots under offer or exchanged,
as they were instrumental in brokering these deals. They will also
be entitled to fees for any future disposals concluded with parties
introduced to the Council during the term their appointments even
if they were to be dis-instructed. In such a situation, and where
new agents have appointed, the Council could then be required to
pay fees
to both the existing agents and new agents for
any sales successfully completed.
 
The value of the new contracts under the
call-off arrangement is estimated at c£68k per agent. The
contracts will last for two years to cover the anticipated period
to dispose of the remaining plots at the site.
 
It is also considered that a full procurement
of the instruction will lead to delays in bringing forward the
remaining plots for sale and therefore receipt of future disposal
proceeds or rent by the Council.
 
These re-appointments have been discussed with
the Project Steering Group and the PH for Property.

Decision

To renew the appointment of Lambeth Smith
Hampton and Savills as selling agents for Eastern Gateway.
 
Reason:
The agents were appointed for their knowledge,
project continuity and market presence, but more significantly to
avoid delays and the potential to pay double fees on the remaining
land sales. The decision has been taken under Part 3, Section 5,
Paragraph 8.2 of the Constitution.