Western Morning News (Saturday)
Leaseholders value disused airport site at over £27m
THE company which holds the long lease for Plymouth’s mothballed airport has put a price tag of more than £27million on the site and says it is likely to increase in value.
Sutton Harbour Group confirmed it is in negotiations about how much the 113-acre plot is worth and said the property should be priced at a lot more than previous valuations.
Philip Beinhaker, executive chairman of the AIM-listed company, told shareholders the balance sheet value of £13.2m is now out of date. This is because the company has spent so much maintaining the Derriford site since flights were stopped in 2011 when the company triggered a so-called “Armageddon clause” enabling it to cease operations if the airport was deemed uneconomic.
In a statement to SHG’s annual meeting Mr Beinhaker said the carried cost of the land, that is the cost of owning and keeping the site, is now £27m but its value as development land would be even more, and rising. He told investors: “At the request of the local authority, the company has entered into discussions regarding valuation of the former Plymouth City airport site, on which the company has a long unexpired leasehold interest.
“The company recorded the airport site at historical cost on its balance sheet at £13.2m as at March 31, 2022. However, the company has maintained the site and carried the cost of capital invested for nearly 11 years since it was closed.
“The present value of the carried cost is approximately £27m and a valuation of the land on a development basis, prepared for the company by an expert valuer, is considerably higher than the present carried cost.
“Whether the former airport site is realised for the company through a transaction or ultimate development, the site is expected by the board to continue to become more valuable as demand for land in Plymouth for industrial, residential or other uses continues to increase.”
Plymouth City Council owns the freehold of the property, but SHG holds an unexpired lease of 135 years on the airport land, with a right to renew for another 150 years. The site has been disused since late 2011 and SHG later produced a plan to turn it into a mixeduse housing-led “garden suburb” estate called Plym Vale.
But planning inspectors stalled development
The site is expected by the board to continue to become more valuable PHILIP BEINHAKER, SHG
until 2024 via the Plymouth and South West Devon Joint Local Plan. A recent SHG financial report said the company is “refining” a masterplan for the site which would see houses built on it.
In July, Plymouth City Council’s Tory leader Richard Bingley said he wants to reclaim the airport and restart flights. He confirmed he had been in talks with SHG and said returning the land to aviation is in the economic interests of the city.
Mr Beinhaker told SHG shareholders that “whatever ultimate use of the former airport site” is, it would create material value for shareholders together with the public benefits of “bold regeneration in urban Plymouth”.