The report was noted.
were provided with an update on the current situation with Swansea Bay City
Deal portfolio private sector investment and contributions as included in the
queried about the digital infrastructure numbers and in relation to the
£14,600,000 investments from Virgin which makes up three quarters of the
actuals to date in terms of private investment.
asked if that funding is work that would have happened anyway and for Pentre
Awel’s investment projections for this year, how can it be expected that
£20,000,000 investment can come this year as that is a considerable amount of
explained that it wouldn’t be possible to answer the first question, but nobody
expected that much investment to be accelerated as fast as it had been.
felt that the model has benefitted the region. Officers explained that in
comparison to other areas, they are doing well and have expanded and
accelerated their digital infrastructure roll out. This is because they have
organised regionally and having lines of engagement and employed staff in the
local authorities supporting digital infrastructure.
Virgin Media numbers of £7,000,000 of expenditure in the region was excluded by
the City Deal Infrastructure team from the £14,500,000 as that was not a direct
involvement with the City Deal infrastructure team or project so they excluded
it from the assessment. The spend in the region was higher if you include that
money, but for the reasons mentioned they could not include it.
referred to the fact that almost half of the actuals and projected private
investments are virgin media related and members are aware that Virgin were
already aggressively investing in this area for market share. Members queried
whether City Deal was underselling itself.
advised they didn’t think so when you look at the breakdown of the providers
and localities and felt that City deal has been ahead of where they thought in
terms of stimulating private sector market and done so to good effect. Officers
advised it would get more difficult as the fully fibred areas dry up, however
there will be an acceleration of 5g test beds and the IOT workstreams are fully
were told that this is a better position than originally thought and is
qualified in terms of claimable investment impacted from city deal and the
digital infrastructure team.
explained that the first tranche of funding for Pentre Awel is coming from
private sector borrowing and they are going into the market to pull down some
money for the core element of the site they are constructing at
the moment. Officers advised that the funding of that will come from the
occupiers that are going on to tenancy agreements within the Pentre Awel
were informed that this first element may slip slightly because there is an
intention to use the funding in the first place and there has been a slippage
in the project, although the core element of the project is still on track for
Autum 2024. The hotel and nursing care will need to break even on their own in
terms of funding as it develops.
Chair clarified with officers if the £20,000,000 is going to be borrowed from
an investment company or bank and then paid back via the tenancies. Officers
confirmed that was the intention and are talking to potential investors. There
are also some discussions with the UK Government relating to grants being
frontloaded and some of our own so officers will rebalance that as and when
appropriate during the project.
asked if this funding would be necessary in terms of the final investment
figure if we were able to be in a position where we didn’t need to borrow,
would officers be confident that they would get the £110,000,000 private sector
investment via the hotel and the rest of the scheme.
advised that the key issue is getting the tenants in to occupy that space and
how you would translate that income stream into a capital value. Now the
funding is needed but there might be other ways of looking at the income
streams. There are the various academic institutions coming in and the private
sector and innovation elements of it and that is slowly picking up momentum.
asked about the campuses and Swansea Waterfront being red risks. Members asked
if officers knew if in 2025 that there will be the start of the investment for
the campuses, and will it be spread over a number of
years? Members also wanted to know in relation to the hotel build and the rental
income from the Kingsway.
explained that the campuses have developed the least. Until the commencement
date and the funding agreement is signed, they won’t know how much it has
slipped by until they can start building. Jonathan Burns advised that there is
a plan and he has spoken to Richard Lancaster of
Swansea University who is overseeing this and has seen the investment plan but
they can’t start this until they get the green light to start building.
explained that a lot of the £15,000,000 of city deal funds is in phase one
around Singleton and Morriston Hospitals and a lot of the private sector
investment is around phase 2. They are in conversations with industry partners
and officers are confident that once the green light comes and they start
delivering then they will start to see it coming through.
were advised that the project lead of the hotel has provided an update to say
that they are still in negotiations with private sector investors and multiple
funding sources for the hotel. The ATG fitout of £1,000,000 is done but they
are still negotiating with the hotel. An announcement is imminent, and they are
having negotiations with hoteliers.
stated that there is a major issue with funding of the hotel.
said that the industry still hasn’t fully recovered, currently the value is at
£19,000,000 and they don’t know how much of it will be coming from private
funding as they may not be willing to invest at that level.
said that there would always be a gap between there between a 3 and 4 star and
the way that gap is made up and the funding arrangement for the initial build
and then the lease afterwards would be done. Members were surprised that its not a red risk rather than amber for that reason.
also felt that the rental for the Kingsway should also be a red risk as well as
they don’t know if the Kingsway will ever get filled up with all the other
building going on currently.
advised that the marketing campaign for the Kingsway is due to happen shortly.
Indications are the opposite, catalysing the need for more office space. The
Kingsway office space is considered to be high
quality, collaborative space that is highly sort after.
St David have indicated that they already have got 90% occupancy earmarked for
tenants for the Innovation Matrix which is amazing as they only have the seal
structure up currently.
advised that it is only heads of terms at the moment,
and nothing signed but having that indication of tenancy agreements underway or
working towards that is fantastic. It may be stimulating new businesses or
industry into the region, but all those tenants will be announced as soon as
they can be.
advised they were surprised that Homes as Power Stations was marked as green in
the report as there are zero actuals for the first four years and the report is
projecting £1,400,000 for this year. Members said that approximately half of
the projects they are looking at is £1,400,000 out of £375,000,000 which makes
up 60% of all private sector investment and they are significantly behind in
terms of delivering all the actuals of private sector investment.
said that in a weak economy with high interest rates, not knowing what the
future holds and with the construction sector being in a difficult place right
now, members feel it is ambitious to believe that £375,000,000 within 8 years
when so far only £1,400,000 has been delivered in 7 years.
advised that the £1,400,000 is actuals and that there is a lag in the reporting
as they have to gather reports and then the project
lead is in the process of gathering those together for this financial year.
Willis advised that Homes as Power Stations is linked to capital builds and
linked to funds that haven’t been launched yet. The projections for private
sector leverage are towards the end of the program so the next 2-3 years and is
is a pipeline of developments through the local authorities, through the RSLS
and the private sector. There is the supply chain mapping exercise that has
been done and they are fully resourced now. They have already started the
delivery of Homes as Power Stations programme. Even though business plans are
approved, and they are confident that the private sector projections leverage
will be as met. That has been re-profiled because there is a lag in terms of
construction, but they are confident they will meet those figures.
wanted to clarify what gives officers the confidence that they will be able to
meet these figures, given every build project has slipped and the costs for
everyone has increased. With a weak economy and a fully booked construction
industry, how will they have the capacity to deliver £375,000,000 in 8 years.
explained that the Homes as Power stations isn’t a standalone building
programme and is linked into the developments already projected and the aim of
the project is to encourage the developments to look at renewable technologies.
The housing developments would already be happening, the Homes as Power
stations are sharing those lessons learned.
advised that the projected plan for Swansea North house building between
Penllergaer, Loughor, Gowerton and Gorseinon was around 1500 houses back in
2019, up to now only 150 have been built. Members advised that quite a few of
the larger builders are having problems currently building the vast estates and
its only smaller builders who aren’t having problems who are managing to build
the smaller estates.
believe that they need to be very cautious how the £375,000,000 is going to be
spent. Members said that some successful retrofitting has happened in Clydach
on Homes as Power Stations and maybe at some point in the future it may be
worth looking seriously at whether retrofitting houses as well as building new
clarified that Homes as Power Stations is looking at new builds and the
retrofit market and can provide an update for members.
feel that it is a big undertaking to get all this done in such a short space of
time and all the issues they mentioned before in relation to the timeframe and
the current situation of the economy, cost price increases and the position of
the construction industry.
would welcome a report to provide assurances on the plans and to see how the
retrofit process would work. Members also brought up that they may add site
visits to the Forward Work Program.
Brennan advised members that there is always an element of risk when you are
relying on the private sector and all authorities are going through the LDP
process currently and everyone has ambitious plans in terms of housing delivery
whether they have to work with public sector partners,
RSLS. Carmarthen and Swansea also having their own in-house housing as well.
advised that it’s about connecting with the private sector and encouraging them
to deliver. Officers explained that it is also about working in partnership
with colleagues in planning as well and creating the environment for volume
housebuilders to want to be engaged in the Southwest Wales region.
advised that the demand is there for houses due to the work happening on the
freeport and the general economic growth in the area and its
about being able to reach supply and encourage contractors in. Officers
commented that hopefully if they can see the economic growth then these house
builders will be encouraged to build here.
relation to retrofit, officers advised that there isn’t a lot of money
available and its about proving concepts and then
making sure there is a good pathway when other funding stream become available
to encourage retrofit across the region.
suggested that we may need to lean on ourselves due to the way mortgage rates
are increasing causing people issues in getting a mortgage as well as
retrofitting in the authorities housing stocks or working with partners.
The report was noted.