Location
Wherever opportunities or need is identified within the District, in order to acquire or develop good properties or deliver projects of infrastructure which achieve some or all of the Council’s multiple objectives and desired outcomes as stated above and are deemed as an acceptable risk.
Tenant Mix
Where possible, a mix of tenants will be sought to create a balanced portfolio.
The final decision over the appropriateness of any tenant would be reviewed at the time of acquisition.
SHDC owns a significant number of regeneration and business units already within the District, mainly smaller units and tenants with relatively low credit ratings. This reflects the historic policy of supporting small start-ups which has proved successful and continues to be.
Lease Length
A minimum 4 years unexpired (mean unexpired term for multi-let properties) is preferable, however this is flexible if it helps achieve the strategy objectives
For multi-let properties, a mix of lease expiry dates are preferred, thereby limiting void risk (unless the property is purchased with a view to re-development)
Properties would preferably be let to sound tenants on leases with a preference for ‘Full Repairing and Insuring’ leases for single occupiers and through internal repair obligations and a service charge for multi-let properties.
There may be overriding community benefit and/or economic reasons to move away from these criterion and these will be considered on a case by case basis.
For all of the above:
The final decision over the definition of “good”, “secure”, “strong”, “long”, “careful”, “controlled”, “acceptable”, “balanced” and “risk-averse” will be agreed between the property acquisition advisers (including legal due diligence) and the Officers delegated with the responsibility to conclude the acquisition of the properties.
This discretion will be based on both the risk to the capital value of the asset and its fit with the strategy objectives.