Financial Performance: 2017 and 2018
The Society did not seek further community share investment in 2017. The focus of the year was completing the land purchase of the last 31 acres, getting the renewable energy system working, bringing broadband to Stockwood, and filling the units left vacant by the departure of SL Shop.
This year they have paid out their 4th annual dividend at 5%; representing a dividend payment in every operational year.
The Business Park received total gross rents of £215,000 and was % occupied (based on floor area) in the year which compares favourably to the regional average of circa 85-90%. The office rents achieved an average yield of £10.50 per square foot, and industrial rents (of between £3.00 and £5.00 per square foot) which compare well for properties of similar, age, construction and location in competing markets. Tenant retention and length of occupancy compare very favourably to other business parks; at Stockwood tenants regularly expand their operations (increasing the space they require) and remain on site over many years.
In 2017 Renewable Energy income increased by £25,000, rather than £50,000, in part because of delays in fully realising the benefits of the heating system due to the complex installation and the learning curve involved in operating it efficiently.
Reason for Voids in 2017
Stockwood was negotiating with NFU Mutual to move their regional office to the Business Park; this would have been a gold-plated lease lasting 15 years and bringing a very high profile and prestigious tenant on board. SCBS held the space open for nearly 6 months while they waited for the optic fibre broadband to be installed. However, it did not arrive in time for NFU Mutual to lease the property so this opportunity was missed – although SCBS then quickly let the units to other tenants. In the 6 months to 30 June 2018, the Business Park has demonstrated 96% occupancy, and they are working on the voids (empty non-rented space) that may open up in 2019 now. Normally new tenants are found before units are vacated to avoid having voids.
Using Electricity Efficiently: Weather Compensation
It was necessary to operate the heat pumps inefficiently because SCBS were fault tracing for a series of unusual and unfortunate problems that arose, which meant that they were run at full-power. However, with the machines operating properly since the 1st quarter of 2018, they are now running them in “weather compensated” mode, which means that they will use less energy, only generating the hottest water when it is really cold. Weather compensation saves 15-25% of energy consumption.