Shetland’s community funds have been given a much-needed boost by the news that the charitable trust’s property leasing arm turned a profit of almost £4 million in the last financial year.
Slap (Shetland Leasing and Property Developments Ltd.), a wholly-owned subsidiary of the charitable trust, was this year able to provide £3.83 million to the trust’s coffers. Because it is designated as gift aid, neither Slap nor the trust will have to pay any tax on the profits.
The chief reason for the upturn in profits is the additional income provided by the buildings Slap owns at Scatsta Airport, meaning its overall rental income went up by more than £1 million between 2007/8 and 2008/9. The rent it takes in has also doubled in the last two years.
Other major money-spinners among the 34 properties owned by the company include facilities at the Greenhead Base, the NAFC marine centre at Scalloway and the further education college at Gremista.
Most of Slap’s properties have private sector tenants, with the council being the tenant at only four properties and part-tenant at a further two. It owns the Solarhus complex at the North Ness, a string of buildings along Commercial Road, Lochside Stores and Visit Scotland’s tourist information office. Outside the town, Jamieson’s spinning mill at Sandness and the Laxfirth slaughterhouse are among its portfolio.
Company secretary Jeff Goddard is confident that Slap’s recent success will be able to continue. It has recently applied for planning permission to build a £7 million, 3,000 square metre office complex on the former WAG site at the North Ness.
That would provide working quarters for around 130 staff from the council’s social care department. In turn, it is hoped that some of their existing buildings – 91-93 St. Olaf Street, the House of David, Quendale House and some small properties – will then be able to be used for housing.
Looking further ahead, the other major piece of work being undertaken is the development of up to 200 new homes on the land to the north of the old Staney Hill road. Slap is continuing its work on a plan for the area which is likely to result in a mixture of council housing and private developments.
The new Anderson High School is also now to be built on some of the land that is already designated for educational use. Slap is still finalising the purchase of a small pocket of land further north of the AHS site, a matter which has been dragging on for a number of years. The matter is in the hands of lawyers and Mr Goddard is hopeful things can be resolved soon.
There have been some delays on the work at Scatsta, with a new helicopter hangar only completed in June. The design for the extended and refurbished terminal building is still being finalised.
The work is being funded by an £8 million loan to the Integrated Aviation Consortium (IAC) which was controversially approved by trustees just days before the May 2007 elections. That prompted criticism from some councillor-trustees. The consortium had been threatening to leave Scatsta prior to the elections, leaving some concerned that trustees had been spooked into acting by oil industry pressure.
But Mr Goddard is confident that it will work out to be a profitable investment for Slap, which will get £1.6 million each year for five years from the IAC before the returns start to decline. It has only spent £3.5 million of the agreed £8 million to date after delays.
News of the profit could not have come at a better time for the charitable trust, which provides funding to the recreational trust, the amenity trust and Shetland Arts as well as a host of other projects.
Its spending strategy is based on the size of its reserves being somewhere around the £220 million mark and generating a return of around five per cent each year from its investments on the stock market.
But the impact of the financial crisis has meant the investments’ market value has rarely been much above £180 million – meaning the returns have been reduced. The trust’s investments stood at £174 million as of last Friday. On top of that there is a further £25 million held in the form of Slap assets and local investments.
~ Meanwhile, following the resignation of Allan Wishart from Slap in August, Addie Doull and Robert Henderson have been appointed to the board. They now sit alongside chairman Jim Henry, vice-chairman Bill Manson and trustees Sandy Cluness, Allison Duncan, Caroline Miller and Iris Hawkins.