Decision made to proceed with the contract with Countryside within the confines of the Cabinet approval dated 29th November 2023.

To enter into a formal contract with Countryside outside of the Development Agreement to capture the capital value from Countryside’s headlease sale as relates to the notional 4,000 sq. ft commercial floorspace.

An alternative strategy to have rental income in lieu of capital value was considered but not agreed to by Countryside, as they control the headlease and the occupational leases. Additionally, not proceeding with the contract with Countryside means RBWM will have no mechanism or ability to legally obtain or retrieve the capital value relating to the notional 4,000 sq.ft of commercial floorspace which physical space is already occupied by Masters and Anytime Fitness.

The option of 'do nothing' means RBWM will not have the benefit of the capital receipt from the reversionary sale by Countryside.

There will be some time lag of 24 months after the date of the contract or a defined period in agreement with RBWM, before the capital receipt for the reversion is realised. This is simply because of the marketing period required to promote and sell the commercial units as a portfolio asset or the grant of individual leases.

Planning – Non material amendments were previously approved by the LPA in relation to the commercial units which enabled Countryside to let the units. Planning consultation with the LPA and approval in place.

Contractual – Contractual safeguards including expert determination, Interest accrual on sum not paid and clearly defined obligations on Countryside. There is restriction on registration at Land Registry until RBWM is in full receipt of all payment. There is also restriction on permitted disposal on Countryside as relates to its headlease.

Financial - Countryside going insolvent. There is Parent Company Guarantee in place.

Income Reduction or Lack of Sale – Weakened demand for rental or sale of commercial properties against the backdrop of a weakened economy. A minimum capital receipt as payment settlement is provided for in the event Countryside is not able to realise the sale by the target date or a defined period to be agreed.

The minimum capital value has been assessed based on the capitalisation of the average rents achieved for the letting of the commercial units 2.1 to 2.3 within the area which otherwise would have been the space to be occupied by RBWM or a third-party occupier. The total commercial floorspace footage for units 2.1 to 2.3 is 9,259 sq.ft of which 4,000 sq.ft (i.e. 43.2% of the total) relates to the contractual obligation Countryside has towards RBWM and the basis of this cabinet report.

Elizabeth Griffiths
06/11/23

Previously considered by SCP/ELT. No financial consideration involved except for legal fees.

Gowlings
26/09/23

The receipted funds could be used to contribute towards future affordable housing provision for those who are on low incomes or unable to access such housing in the private sector.

The York Road development is sustainable given its location within the Town Centre with the development designed and constructed in accordance with the Approved Documents to meet the prevailing Building Regulations requirements and comply with RBWM’s Corporate objectives.

GDPR is not relevant for this proposal and project.

Any decision which is taken in exercise of an express delegation made to an officer by the Cabinet or a Cabinet Sub Committee