Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
1. The Cabinet noted that in accordance with the agreed Asset Strategy and the delegations from Cabinet that the Authority had acquired 195-200 and 222-226 High Road Loughton, a mixture of retail and residential units. The total costs of the purchase was £23,820,950; consisting of the purchase price of £18,645,000, Stamp Duty of £921,750, legal and professional fees of £340,805 and VAT of £3,913,950. (It should be noted that these figures are subject to alteration as the Authority has elected to add this property to its HMRC approved VAT scheme and that other minor changes in Stamp Duty and fees may occur, all to the financial benefit of the Authority).
2. The Cabinet noted that Councillors S Stavrou, H Whitbread and A Patel in discussion with the Leader and the assistance of the Estate Team and Section 151 Officer, formally considered and unanimously agreed the purchase and signed the decision sheet accordingly.
2. The Cabinet noted that the information provided to the decision makers showed a gross annual revenue yield of £1,425,602, or 5.98% against the guiding benchmark of 6.00%.
3. The Cabinet noted that the information provided to decision makers showed a net (after £390,780 of building depreciation costs as per the historic approach in EFDC, and insurance and £309,000 of financing costs including the cost of lost interest on current cash surpluses), annual revenue yield of £717,823 or 3.01% against the guiding benchmark of 3%.
4. The Cabinet noted that the information provided to the decision makers showed an analysis of key risks and sensitivities that could be appropriately managed.
5. The Cabinet noted that the information provided to the decision makers showed that future capital growth was a possibility with additional expansion and improvement to the flat units, (this development was not planned at this stage).
6. The Cabinet noted that the Authority was awaiting confirmation of the VAT status of the project and a final statement of fees and charges for the solicitors. All the expected movements in costs were marginal and would work in the Authority’s favour.
Report author: Nick Dawe
Publication date: 07/01/2020
Date of decision: 06/01/2020
Decided at meeting: 06/01/2020 - Cabinet