Property can play a vital role in local government funding and Portsmouth City Council has put it at the centre of a commercial approach that Property Week’s recent article on the City Tracker report revealed will see the city go from fifth slowest-growing city in the UK to the seventh fastest by 2026.
Portsmouth is the UK’s only island city with more residents per square mile than anywhere outside London and an ageing and growing population. The council is working hard to meet these challenges head-on while continuing to provide high-quality services for residents, and a new entrepreneurial approach to property is seen as an important part of our strategy to strike that difficult balance.
We’re trying to run the city more like a business so development and investment is overseen by a development board of experienced, skilled, key decision-makers from a range of relevant disciplines, chaired by the leader of the council. This streamlines the process and allows the council to stand toe to toe with private sector competitors.
The new commercial approach includes: a £150m property investment strategy to expand an investment portfolio already returning £7.5m per year; the construction of a 45-acre business park to add to the council’s 2,500 assets, which have a total value of £1bn; and the launch of an arm’s-length property development company and the largest council property building programme in the city for a generation, which will expand an existing stock of circa 17,000 properties.
We have pushed forward a new property investment strategy and established a £150m property trading fund. So far we have purchased five properties - a £9.7m Matalan retail warehouse in Swindon, a £13m Waitrose supermarket in Somerset, an £8m industrial warehouse near Gloucester, a £12.4m DHL parcel distribution warehouse, near Birmingham, and an £8.75m Mercedes Benz showroom, in Eastleigh, Hampshire.
The council is attracting more and more investment into the area and is dedicated to supporting projects that will not only improve infrastructure and attractions but also create economic growth by boosting jobs and opportunities for residents.
Along with the investment work outlined above we have a stream of development projects in the pipeline, which we are using to create assets that we will hold for revenue generation.
The highest profile example of our commercial development activity is Dunsbury Park, a major new 45-acre industrial and distribution business park the council is currently building on land it owns next to junction 3 of the A3(M) on the London/Solent corridor. Dunsbury will offer bespoke facilities on a built-to-suit basis from 20,000 sq ft to 200,000 sq ft.
We received outline planning permission in early 2014 for 750,000 sq ft of floorspace including warehousing, factory space, industrial units, office and hotel and conference facilities.
After successfully securing the first pre-let, work started early this year on a distribution centre for international outdoor lifestyle clothing brand Fat Face. The unit, totalling 80,000 sq ft, plus a 40,000 sq ft extension option, will be completed later this year and an access road has been built to unlock the site.
This is a great example of how we can use council land, assets, and our expertise, to boost the local economy by creating jobs and generating revenue income - and we are not just working on large scale schemes. More locally, on the island, we are developing a former industrial site with a scheme of 22 small industrial and enterprise units ranging from 441 sq ft to 2,800 sq ft. We want to use the site to give local businesses the opportunity to flourish by providing bespoke, modern units for which there is a huge demand in the area.
In the meantime, Portsmouth City Council will continue to put property development and investment at the centre of a forward-thinking income generation strategy that will assist us with the next phase of delivery of Dunsbury Park and open up the possibility of housing development in the private market.
Tom Southall, Portsmouth City Council’s investment and property manager