Since the end of the recession, collaboration between local authorities and property developers has been on the increase.
A growing number of authorities have recognised that to address the economic damage caused by the previous eight years of downturn they have to take a more hands-on approach to enhance their local business environments.
This trend has been most vividly illustrated in the retail property sector where authorities have geared up to deliver major projects in partnership with property companies. However, it is a model that has the potential to be applied in other sectors, including industrial.
Chancerygate’s recent appointment by Carlisle City Council to asset-manage two major industrial estates in the city is an indicator of this. The council owns the freehold of the Kingstown and Parkhouse industrial estates, which are home to more than 140 international and domestic businesses that employ more than 2,000 people. Their importance as an economic engine is clear and the council recognised that to maximise the potential of these holdings it needed expert and dedicated input.
Bringing together private sector expertise with local government vision seems like common sense, but the process of creating a partnership between the two needs to be rigorous.
Joint ventures between local authorities and property companies are governed by the OJEU regulations, which take their name from the Official Journal of the European Union in which contracts need to be advertised.
Compliance requires a detailed approach and it is a process that only makes business sense if the envisaged joint venture is of an appropriate scale and duration. Of course, it is a moot point how these relationships may be governed post Brexit, but it is unlikely that local authorities would feel comfortable without a similarly thorough procedure.
Authorities have recognised that they need a more hands-on approach to enhance their local business environments
Ultimately, tendering successfully for these opportunities is not just an exercise in form filling. We won the Carlisle mandate because, in the council’s words, our tender was “fully scrutinised and considered to be the one that offered the best opportunity to the city council to meet its objectives in enhancing its investment in the Kingstown and Parkhouse industrial estates, thus ensuring further growth through a combination of specialist asset management, development and investment skills”.
In this context, the value of experience and a credible track record cannot be underestimated.
Creating these partnerships is a challenging process but they can play a vital part in enhancing many business environments across the UK.
Eddie Cook is managing director of Chancerygate