This report seeks approval from Cabinet Committee Property for the Council to take a new lease of the Indoor Market, Edgbaston Street, (shown edged red on the Plan at Appendix 1) to be granted by Bull Ring No.1 Limited and Bull Ring No.2 Limited (subsidiaries of Hammerson Plc) in order for the market to continue trading without interruption.
The current lease expires on 29 September 2025. The new lease (continuous from previous lease) from 29 September 2025 until 1 October 2027, will allow time to plan and implement a temporary market strategy as part of the Smithfield regeneration and redevelopment.
Hammerson Plc, the parent company of the Landlords, are pursuing a planning application (and appeal) with a plan to redevelop the Edgbaston Street indoor market site for new homes. Hammerson Plc’s subsidiaries are prepared to grant a new lease whilst this planning process is underway and have a clear intention to redevelop the site which will require the indoor market traders’ sub-leases to be determined.
A new temporary home for the market traders will be provided, as part of the arrangements for the development of the former Smithfield Markets site, until the new, permanent market - which will form part of that development - is in place.
The temporary market will house all market traders from the indoor market, the Rag market and the outdoor market until the new permanent market is redeveloped as part of the Smithfield regeneration.
The new lease does not commit the Council to any greater financial commitments that do not already exist under the terms of the Council’s current lease, which will expire on 29 September 2025 by virtue of notice served by the landlord under an early termination provision in the Council’s current lease.
It should be noted that in the event that the Council do not enter into the proposed new lease by 29 September 2025, the Council’s rights to continue to occupy the indoor market will cease on that date and the site will revert to the landlords, who will then become the direct landlords of the market traders operating from the indoor market under their sub-leases from the Council. In addition, the Council will become liable for a terminal dilapidations claim from the landlord, at a time when there has been no recent investment by the Council in the state and condition of the indoor market.
Under the proposed new lease, the Council’s responsibilities as to the state and condition of the property at the end of that lease will be determined by the outcome of the landlord’s planning application for redevelopment of the site and whether, as result, redevelopment of the site by the landlord can proceed or not. The Council’s responsibilities as to the state and condition of the property will be greater if there is to be no redevelopment but will be greatly reduced if there is to be redevelopment. In addition, under the proposed new lease, the Council must deliver vacant possession of the property at the end of the term of the new lease and must indemnify the landlord, and any members who are part of the landlord’s group of companies, against all expenses, proceedings, costs, claims, damages, demands, expenses, charges and taxes the landlord or their group become liable for as a consequence of the Council failure to comply with its obligations under the lease.