Council partnerships expertise

February 13, 2019

Words James Cogavin, Director in the Investment team at Lunson Mitchenall |

We have recently undertaken a number of interesting projects on behalf of councils, extending our expertise into the public sector.

We are seeing many local authorities paving the way to regenerate their town centres. As the retail market weakens, local authorities are finding that the private sector is increasingly willing to sell large town centre assets, which provides the council the opportunity to take a more proactive role in its future regeneration and town centre master planning.

Local Authorities are being given financial assistance to acquire these assets in the form of senior debt from the Public Work Loans Board (PWLB), a statutory body of the UK government. Unlike traditional loans in the private sector, these loans can be up to 100% of the value with interest payments fixed for up to 50 years.

One example of a Local Authority that Lunson Mitchenall has assisted with regeneration was Runnymede Borough Council. This council owned the freehold interest of large parts of Egham town centre, but the controlling interests was with the various long leaseholders. Following the acquisition of the long leasehold interest of a parade of 18 retail units on High Street, Lunson Mitchenall acquired a separate adjoining long leasehold interest of the Waitrose and Travelodge for £21.6m on an off-market basis. Therefore, providing the council greater control for potential town centre regeneration and a reliable income stream.

The loans from central government have low rates of interest, and therefore can be a generous yield gap between the investment yield and the cost of borrowing. This can be used by local authorities to boost their budgets, which have been cut drastically by Central Government over the past five years.

An additional example of this was Lunson Mitchenall’s acquisition of the Sainsbury’s, on Priors Road in Cheltenham, in October 2018 on behalf of Cheltenham City Council for £20.7m (5.0% NIY). The property is a modern supermarket with an unexpired lease term of 20 years at a rent of £1.1m per annum.

There has also been discussions in the media regarding where councils invest geographically. Spelthorne Borough Council and Surrey County Council are two examples that have been mentioned extensively in the press for investing outside their borough. Investment rationale for this can be simply for geographical diversification, lack of suitable stock within the borough, or the health of the occupational markets in other boroughs. We advised Rushmoor Borough Council when it invested outside the borough, with the purchase of a prime retail and office investment in Guildford. Since the date of the purchase, office rents have increased by 20%.

In addition to our investment work, Andrew Reavley, Development Director has continued to expand his list of public sector clients on the consultancy side. His expertise in the private sector have been used to harness the strategic development advice on scheme design, usage and tenant mix and leasing strategy for the likes of Stockport MBC, Manchester CC and Liverpool CC.

We also provide leasing services for Canterbury City Council on the Whitefriars Shopping Centre in Canterbury, following their acquisition of a 100% interested in the scheme in February 2018.

As local authority budgets shrink, we are in a position to come up with creative ways to assist authorities in using retail assets to generate income, to provide vital local services or help create a sustainable future.


As local authority budgets shrink, we are in a position to come up with creative ways to assist authorities in using retail assets to generate income, to provide vital local services or help create a sustainable future.
James Cogavin, Lunson Mitchenall


@lunsonmitchenall are delighted to have acted for intu bringing Uniqlo @uniqlo_uk to @intuwatford joining recent entrants @debenhams, @hugoboss and @hollisterco #intupropertiesplc #intugroup #lunsonmitchenall #shoppingcentre #uniqlo #ukretail #newstoreopening
Thankyou to @make_architects for a really interesting evening of discussion, drinks and launch of The Retail edition of their Exchange series. Great thought inspiring talk by Dr Antonia Ward @wearestylus #makearchitects #wearestylus #retail #trends #design #london
The new @superdry store @intupotteries Lunson Mitchenall acting for intu on this letting joining recent new entrants of Tessuti, Scott’s and The Entertainer. Speak to Emma Charlesworth and John Fowler for more information. #intupotteries #intu #superdry #retail #newopening #newstore
Great @superdrug event this morning @theyard_shoreditch As a brand Superdrug are continuing to evolve and engage their customers with full range of beauty and health services. Superdrug mobile coming to stores this year adding another own branded service. #superdrug #beauty ...
Brickwork doing their thing last night @hammerson_plc @shoppertainmentmgmt @lunsonmitchenall joint party 🥳 🍸 💃
A few sore heads after the brilliant Brickwork gig last night. Now onto a busy morning of meetings @revolatest #revo #liverpool
@lunsonmitchenall lunch at @bigmammagroup #Paris #retail #retailproperty #lmstudytour

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