Decision details

Lambeth Smith Hampton and Savills were appointed in late 2019 as joint selling agents for the Eastern Gateway site following an open tender process. Their appointments were documented by way of letters of appointment and this arrangement has continued since. The appointments now need to be renewed and, for the reasons set out below, it is proposed to re-appoint them on similar terms for a further period of 24 months by way of procurement compliant call-off contracts from the CCS Framework.

The existing appointments provide for fees of between 0.4% to 0.7% per agent (depending on the area being sold) of the contracted selling price for freehold sales. For leasehold disposals, the fee is 5.75% per agent of the contracted annual rent. All fees are only due upon a successful sale or letting and the agreed rates are considered competitive.

To date, the agents have been paid for the disposals to LDH and Amazon. They will also be entitled to fees upon the completion of the current plots under offer or exchanged, as they were instrumental in brokering these deals. They will also be entitled to fees for any future disposals concluded with parties introduced to the Council during the term their appointments even if they were to be dis-instructed. In such a situation, and where new agents have appointed, the Council could then be required to pay fees

to both the existing agents and new agents for any sales successfully completed.

The value of the new contracts under the call-off arrangement is estimated at c£68k per agent. The contracts will last for two years to cover the anticipated period to dispose of the remaining plots at the site.

It is also considered that a full procurement of the instruction will lead to delays in bringing forward the remaining plots for sale and therefore receipt of future disposal proceeds or rent by the Council.

These re-appointments have been discussed with the Project Steering Group and the PH for Property.

To renew the appointment of Lambeth Smith Hampton and Savills as selling agents for Eastern Gateway.

Reason:

The agents were appointed for their knowledge, project continuity and market presence, but more significantly to avoid delays and the potential to pay double fees on the remaining land sales. The decision has been taken under Part 3, Section 5, Paragraph 8.2 of the Constitution.