Request for approval to dispose of land at Hainault Triangle, 606-638 High Road, Leyton E10 6RN

Report: 8
Date: 18 November 2010
By: Director of Resources on behalf of the Commissioner

Summary

This report requests members approval to dispose of the freehold interest in the land at Hainault Triangle, 606-638 High Road, Leyton, E10 6RN following an open market tender.

A. Recommendations

That members

1. Approve the disposal of the freehold interest in land at Hainault Triangle, Leyton at the value and to the bidder identified in Exempt Appendix 2 following an open market tender;
2. Note the disposal is consistent with the approval in principle decision made by the Committee on 11 February 2010, and
3. Note that the capital receipts from the disposal will support the 2010/11 Capital Programme.

B. Supporting information

1. The Corporate Real Estate (CRE) SIP aims to i) ensure the MPS estate is fit for purpose and to enable high quality policing in London, ii) optimise the efficiency of the MPS estate, making best use of accommodation and disposing of assets where appropriate and iii) achieve cashable savings.

2. The land comprises two plots. Plot A of approximately 0.68 acres fronts onto High Road Leyton. Plot B of approximately 0.42 acres fronts onto Hainault Road, Leyton. Both plots previously formed part of one larger parcel of land held by the MPA and on which the new Leyton Custody Centre has been built. Plot A & B are surplus to the development requirements of the Custody Centre and consequently remain undeveloped and considered surplus to need and can be released subject to the MPA retaining a right of way over Plot A for emergency access to the Custody Centre. Both plots have the benefit of outline planning consent from the London Borough of Waltham Forest for the erection of residential accommodation of up to a maximum of 40 units. This planning permission being conditional upon the provision of affordable housing and S106 contributions of approximately £30,000.

3. Both plots were openly marketed in a campaign with one other MPA property between August and October 2010. A marketing board was situated at the property and advertisements were placed in the national property press and relevant local press. Strettons Chartered Surveyors as agents acting on behalf of the MPA hosted details of the land on their website and distributed particulars of the property to interested parties. Bids for one or both of the plots were invited to be received by the agents no later than 12pm on 8th October 2010.

4. All bids were sought on an unconditional basis and subject to a standard five year forward-sale clawback clause, to enable the MPA to take benefit in the event that a purchaser subsequently sold the property at a price in excess of that originally paid to the MPA. Bidders were also advised to consider including provision for additional sales overage or planning clawback in their bids.

5. 11 bids were received by the deadline for the first stage of the tender. All 11 of the bids were for both plots. The results of the 11 bids are shown in Exempt Appendix 1. The bids were then evaluated to determine which bids offered the highest value (taking into account any additional sales overage or planning clawback) from a credible purchaser (taking into account the availability of funding) and a shortlist of four were invited to submit their best and final offers. The results of the second stage bids are attached in Exempt Appendix 2.

6. With external advice from Strettons, Property Services recommend Members approve the sale of the property to the highest bidder identified in Exempt Appendix 2. Should approval be granted Property Services will proceed with the completion of this matter and report the transaction in the next quarterly Estate Update Paper.

C. Other organisational and community implications

Diversity and Equality Impact

1. There are considered to be no equality or diversity issues arising as a result of this disposal. The land is surplus to operational needs.

Consideration of Met Forward

2. This proposal aligns with the intent of Met Forward Section 7 - Met Support - in particular demonstrating value for money, by disposing of surplus assets.

Financial Implications

Capital

3. The 2010/2011 revised Capital Receipts budget is set at £22.3m as approved at the Finance and Resources Committee meeting on 21 October 2010. This forecast is to be achieved through the disposal of operational and residential properties that are surplus to requirements.

4. If approved, the receipts generated from the disposal of the freehold will be allocated to 2010/2011 capital programme.

Revenue

5. The revenue costs related to the maintenance of this site based on 2010/11 costs are detailed below. The land has supported the Leyton Custody Scheme, and has been used to accommodate materials / delivery areas and temporary accommodation for the construction teams.

 6. Should the land be held, provision would be needed for perimeter security. Costs to hold the land in the longer term have not been included within Property Services future budgets as approved within the 2010/13 Business Plan; a longer term hold will require funding to be provided through future business planning processes.

Legal Implications

7. The MPA powers to dispose of the freehold by way of sale are contained in s123 of the Local Government Act 1972.

8. Property Services consider the disposal of the freehold to the bidder identified in Exempt Appendix 2 achieves best consideration that can reasonably be obtained in all of the circumstances, having followed an open and transparent marketing and tendering exercise, and having sought professional advice. On the basis of the above information, DLS support the recommendation.

9. The MPA, in exercising its discretion to dispose of the property, must have regard to its obligation to do so fairly having regard to established policy and procedure. On the basis of this report and discussions with Property Services, DLS consider the disposal is compliant with the MPA’s Standing Orders relating to Property disposals, set out in section 10 of Part F.

10. The recommendation is subject to contract, and external lawyers have been instructed through MetLaw (DLS) to complete the conveyance and to ensure the MPA’s interests are protected.

11. The appendices are considered to contain exempt information in accordance with paragraph 3 of the Local Government (Access to Information) (Variation) Order 2006, as it relates to information relating to the financial or business affairs of any particular person (including the authority holding that information).

Environmental Implications

Risk Implications

12. This is a building which is surplus to operational requirements. If approval is not given there will be a risk that PSD will not be able to deliver the capital receipts budget for 2010/11. The preferred bidder is aware that a decision will be taken at F&R on 16 December 2010, however, there is a risk that if approval is not given, then the offer maybe reduced or the in principle agreement will be retracted.

D. Background papers

• Request for Authority to Dispose of Surplus Properties in 2010/2011 - MPA Finance and Resources - 11 February 2010

E. Contact details

Report authors: Neil Webster, Interim Director of Asset Manager, MPS.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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