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RESOLVED:
 

1.   
That the Strategic investment Board approves the
sale of Ranger House to Surrey Property Group (previously known as
Halsey Garton Property Investment Ltd (HGPI), in accordance with the red book valuation dated 29 January 2025
and delegated authority to be given to the s.151 Officer to agree
that amount.

2.   
That the Strategic investment Board approves the
provision of a loan by the Council to Surrey Property Group (SPG),
secured against the Ranger House property, to partly fund
SPG’s purchase and redevelopment of the property. Delegated
authority to be given to the s.151 Officer to agree the loan
details.

3.   
That the Strategic investment Board approves gives
the SPG Board delegated authority to proceed with required
refurbishment works to provide suitable accommodation to lease out
to third parties for the purposes of maximising income for revenue
generation purposes and maximising capital value of the asset once it
is fully let.
 

4.   
That the Strategic investment Board notes that all
of the above are subject to separate agreement by SPG Board in
accordance with its own governance.
Reasons for Decisions:
 

·        
There are currently 2 tenants of Ranger House, the
largest of which has a tenant option to break in November 2025
(which it would need to serve by May 2025). It currently leases and
occupies 20,842 sq. ft Net Internal Area (NIA).

·        
The Council is currently incurring void service
charges, business rates and insurance costs at Ranger
House.

·        
Informed by advice from MAC Consulting (M&E
advisors) and Oktra (design and build
office fit out specialists), the professional team (Colliers and
Owen Isherwood) has carried out initial surveys and occupational
research to inform a Business Plan. This has focused on making
necessary building improvements at minimal non-recoverable landlord
capital expenditure to achieve maximum rental income.

·        
Transferring the asset from SCC to SPG moves the
short-term risk of year-to year-net income fluctuations on the
property from the Council to its wholly owned property investment
subsidiary company. The subsidiary can then plan for dividends and
interest payments in consideration of those forecast movements and
its overall portfolio profitability, smoothing out a degree of
year-to-year volatility of net income to the Council. The
longer-term capital asset value risk of prolonged voids is
unchanged by holding the asset in the subsidiary as fluctuations
would still impact net income (albeit via loan or dividend
payments) and still impact asset value (via potential credit loss
adjustment).
·        
A positive NPV is forecast to be generated,
including the capital receipt to the Council and future benefits to
SPG that would flow to the Council over time. The Council’s
Central Income and Expenditure budget would also
benefit.
 
(The
decisions on this item can be called-in by the Resources and
Performance Select Committee)