The Land Asset Optimisation Strategy (LAOS) was developed by the Town in 2013 to determine if any opportunities are available on property and land assets owned or controlled by the Town to ensure suitable returns (social, environmental and economic). If any economic potential exists, this should be maximised to reduce the Town’s reliance on rates revenue.
Council considers the LAOS and the potential income generation from its land and property assets as critical to part of the long-term vision for financial sustainability and revenue diversification.
The Town owns a broad range of assets - land being just one type. Similar to any other asset class, the Town needs to manage and maintain its freehold land and property assets with financial, economic and risk management considerations in mind.
Identifying and realising the full potential for income generation from appropriate land and property assets is a complex process, involving:
- detailed financial modelling,
- commercial negotiations, and
- market analysis
in order to achieve the best possible result.
Also, Council must understand any risks involved and ensure that any actions do not adversely impact on the financial position of Council.
Having underutilised land and property assets creates significant real and/or opportunity costs to the Town and impacts our aim for financial diversification and sustainability. An investment strategy currently under development will guide the acquisition of property focused on delivering a financial return to the Town. These properties will aim to provide a dividend to the Town that can contribute to the Town’s finances or be reinvested.
The LAOS strategy was received and approved by Council with a recommendation that any proposal in respect to Council-owned or controlled property would be considered by Council on a case-by-case basis, with reference to the LAOS, Council Strategic Community Plan and Long Term Financial Plan.
Funds generated from the optimisation of land are transferred into the Land Optimisation Reserve to assist in funding future LAOS projects and the investment required to build on the Town’s property portfolio.
The LAOS was received as a confidential item at the October 2013 Ordinary Council Meeting. The strategy has not been made public as it contains market sensitive information that if made available, would place the Town in a financially disadvantaged position.