Decision details

To seek Executive approval in principle for the sale of development land at Solent Airport with Delegated Authority for the final terms of the agreement.

DFS Composites Limited (DFS) wish to acquire a 999-year leasehold interest in a 1.17-acre site on Vulcan Way, Faraday Business Park (North), to develop a new purpose-built manufacturing facility.

DFS are an existing high-tech occupier of Faraday North specialising in turn-key tooling solutions for composite manufacturing including moulds and assembly jigs for the wind and aerospace industry.  Founded in 2015, the company is growing to be a global supplier of specialist blade tooling solutions and assists in the manufacture of some of the largest wind turbine blades in the world.

Having signed a 10-year lease of Unit 15 Faraday Business park in January 2023, the company has outgrown its current premises and needs to expand.  It has identified a 1.17-acre site on Faraday business Park as the preferred location for a new purpose-built manufacturing space.  Heads of Terms have been agreed for the sale of the long leasehold interest in the site for £936,000 which equates to £800,000 per acre.  The proposed new factory with ancillary offices will extend to 2,154 square metres (23,185 square feet), effectively twice the company’s existing floorspace.  DFS does not expect to vacate its current premises and the target date for completion of the new premises is Q1 2026.

The commercial terms of the transaction have been negotiated by officers on a conditional basis.  The structure of the transaction is for DFS and the Council to commit to a conditional sale contract with a deposit being paid.  The main conditions are DFS obtaining planning consent and securing development finance and once all satisfied, DFS will be granted a 999-year lease and the balance of sale price paid.  In the event that the development is not delivered within a short defined timeframe and to ensure the site is not left undeveloped, the Council will have an option, but not an obligation, to buy the site back from DFS at a price based on the lowest of a fixed percentage of either its Market Value or of the original purchase price.

DFS are keen to progress with the development and have at risk, appointed a professional team to commence work on the preparation and submission of a planning application with an intention of occupying the new premises in early 2026.

There are constraints, primarily DFS’s condition of obtaining a satisfactory planning consent which will include identifying a Biodiversity Net Gain solution which will require resolution before the transaction can complete.  This elevates the risk associated with the transaction proceeding and the commercial terms changing, however DFS is advanced in addressing these matters.

From the Council’s viewpoint, conditions include Executive approval and compliance with S123 of the Local Government Act 1972, the requirement to achieve best value.  The Council’s retained valuer has already confirmed that best value is being achieved with this transaction.

RESOLVED that the Executive agrees:

(a)  to proceed with the transaction to DFS in principle; and

(b)  that authority be delegated to the Director of Planning and Regeneration, following consultation with the Section 151 Officer and the Executive Member for Policy and Resources, to approve final terms should they depart from those outlined in the report and provided the final sale price agreed is above an independent s123 valuation.