Renting or leasing services of own property

Description

The Council is taking 2 leases each with a term expiring after 37 years of a mixed use site comprising retail and commercial accommodation (the Property) from Aviva Investors Commercial Assets GP Limited and Aviva Investors Commercial Assets Nominee Limited as trustees for Aviva Investors REaLM Commercial Assets Limited Partnership (the Landlord). The Landlord intends to procure residential accommodation at the site of one lease (detailed in II.2.4). These works will be funded by the Landlord and the Council will not specify the works or oblige the Landlord to complete the works. Incidental to the retail/commercial lease the Landlord will also fund improvement works to that accommodation to bring it up to a good standard to sufficiently attract new tenants and retain existing tenants. As part of the arrangements Reef Estates Regen Limited (the Asset Manager) shall also provide general maintenance and management services as required under the terms of an asset management agreement. The Council will take 2 leases, each with a term expiring after 37 years, of a mixed use site currently comprising retail and commercial accommodation (the Property) from the Landlord. The Council will sub-lease the Property to a wholly owned subsidiary of the Council (the Council LLP). The Property is subject to various interests including occupational tenancies and the Council LLP will be the direct landlord of those tenants. The Landlord intends to procure the construction of residential accommodation which will be funded and specified by the Landlord (at a cost of approximately 16 600 000 GBP) on the site of one of the leases. Neither the Council or the Council LLP are specifying the residential accommodation works or obliging the Landlord to deliver those works. The Council is entering into the other lease on the basis of the Landlord's proposal to fund improvement works to the retail and commercial accommodation to bring it up to a good standard to sufficiently attract new tenants and retain existing tenants. The works will be funded by the Landlord (at a cost of approximately 5 500 000 GBP) and neither the Council or the Council LLP will be specifying the works. The lease of the area intended for the residential works will be granted on practical completion of such works. Some of these works may be carried out upon or within areas that are currently put to commercial use and pending commencement of carrying out of residential works on these areas the Council may take a lease, at no extra rent, of these areas (whether by way of one or more separate leases or as part of the lease referred to in the paragraph above). As part of the arrangements Reef Estates Regen Limited (the Asset Manager) shall also provide general maintenance and management services for a term of 5 years (at a cost of approximately 615 000 GBP) under the terms of an asset management agreement with the Council LLP. The works and services being provided by the Landlord and the Asset Manager are incidental to the leases under which the Council is paying a total rent of approximately 53 600 000 GBP (prior to indexation) over a period of 37 years.