Plymouth’s disused airport site has been valued at almost £13m but the company which holds the lease on the land thinks it is worth at least double that.
Newly published accounts for Sutton Harbour Group Plc (SHG) reveal the firm holds an unexpired lease of 136 years on the site – with a right to renew for another 150 years.
A strategic report in the firm’s financial review reveals the 113-acre site has a carrying value, that’s its value minus any depreciation, of £12.962m, which has gone up by £1.483m since 2013.
But SHG thinks it is worth much more than this because the land could be developed and said it is working on a masterplan for the site.
It has not given details of what that plan is other than to say it is considering “a range of urban uses”, which is often defined as including residential, commercial or industrial buildings.
Before the current directors, led by Canadian businessman Phil Beinhaker, took charge at SHG in 2018 the company had produced a plan for a mixed-use housing-led “garden suburb” estate called Plym Vale.
But no development can take place on the site until 2024, after planning inspectors safeguarded the plot in March 2019 for aviation operations only for five years via the Plymouth and South West Devon Joint Local Plan.
The SHG report said: “The company has continued to prepare its masterplan for alternative use of the site reflecting the Government planning inspectors that presided over the 2019 new local plan.”
It added: “The site is safeguarded from development until 2024. The group has ready proposals for a deliverable alternative use of the 113-acre site which meet the social and economic needs of Plymouth.”
And it also said: “Accordingly the group is working towards options for the development of the site and developing a masterplan.
“This strategic asset will either be redeveloped for a range of urban uses or re-opened as an airport, but in either case the intrinsic value of the asset is represented by its potential urban uses.” This means the company thinks the land should be worth much more because of its potential to be developed. And the report adds: “The company does not regard the carrying value of the former airport site to be reflective of its value for alternative use.”
It doesn’t give a value but it could be more than double the carrying value, so maybe more than £26m, because the report says: “The net cash expenditure on the airport asset, former aviation operations, cost incurred to inform sustainable alternative use, ongoing site maintenance and security, together with interest costs thereon is more than double the carrying value, which is in turn significantly less than the value that can be earnt from development of this strategic asset. This enhanced value of the site is not reflected in its carrying value as recorded in the development inventory.”
The statements about the former airport site are included in Sutton Harbour Group Plc’s annual report and financial statements for the year ended March 31, 2021, which also reveal the company made a pre-tax loss of £2.373m compared to a £756,000 loss for 2019/2020. The firm’s total estate was valued at £47.32m.
SHG bought Plymouth City Airport Ltd and the long lease of the airport site from Plymouth City Council in 2000. It owns some freehold land on the 113-acre site but the vast majority is in the lease, which is in the hands of a wholly-owned subsidiary known as Plymouth City Airport Ltd.
Business Live’s South West Business Reporter is William Telford. William has more than a decade’s experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
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Plymouth City Council agreed to the airport’s closure as of December 23, 2011, due to “withdrawal of flight services and unsustainable losses”, the financial statements said. At that time SHG triggered a so-called “Armageddon clause” enabling it to stop flights if the aerodrome was deemed uneconomic.
In December 2020, Plymouth City Council revealed it is exploring the idea of reopening the airport and had asked the Government’s newly formed Airfield Development Advisory Fund for help to obtain a clear picture of what level of investment would be needed to reopen the airport for commercial passenger services. The council also appointed a specialist aviation consultant to approach potential operators to assess the market appetite for a private sector company to restart flight and said it was in talks with SHG.