West Lindsey District Council has purchased a property in the district as part of its investment strategy to support services for local people.
The news comes just weeks after the council received an unqualified audit outcome and value for money assessment from its external auditors.
The council can reveal it has now purchased a property in Gainsborough for £6.1million making it the fourth purchase to date. Leader of the council, Cllr Jeff Summers has also confirmed there will be more property purchases in the coming months to support local services.
He said: “We cannot sit back and take the cuts to our budget without doing everything we can to bring in extra money to help maintain and improve the services that matter most to local people. That is the basis for our property investment strategy. We have been open and transparent about what we are doing from the beginning. We consulted with residents as part of our budget consultation on plans to invest in properties, which was supported.
“We have also made it very clear that our investments, whether they are inside or outside the district, will ultimately support services and be put back into the economic regeneration and growth of our district. We’re trying to generate the best possible return for our residents and will, therefore, consider investing in opportunities wherever they arise. The council has sound financial and legal knowledge and great care is made on each of the investments which must follow tough guidelines before any purchase is made.”
Since the launch of the investment strategy in April 2017, the following property investments have been made:
- Bradford Road, Keighley property for £2.35 million, sub-let to Travelodge
- 43 Penistone Road, Sheffield. £2.545 million, Let to Greenwich Leisure Ltd
- Unit 7 Drake House Sheffield for £3million. Let to Panache Lingerie Ltd
- Unit 5 Sanders Road, Gainsborough for £6.1 million. The property is let to Coveris Flexibles (Gainsborough) Ltd.
The four investment acquisitions concluded to date generate a diverse and sustainable contribution to the council’s revenue, which can be grown over the medium-term.
Richard Brooke of Cushman & Wakefield, who worked with the council on purchasing the property, commented: “The Gainsborough acquisition is the most significant in terms of lot size and portfolio weighting and it was great to be involved with the council in supporting one of their local occupiers”.
A second Gainsborough property is also under consideration and it is hoped that contracts will be exchanged in the near future.
Nationally, all councils are faced with continued reduction in grants from central Government and it is anticipated to be reduced to nil by 2020. Grant funding to West Lindsey District Council has reduced by £4m since 2012.
Ian Knowles, Executive Director of West Lindsey District Council, explained councils have to do things differently in order to deliver services for local people.
He said: “We are not alone in our approach to investment opportunities. Our investment strategy was approved by the council’s Corporate Policy and Resources Committee in April 2017.”
Mr Knowles explained the potential £30 million which was made available to create a portfolio of investments which will generate income from rent and future resale to support services, economic regeneration and growth.
He added: “If suitable investment properties became available in West Lindsey it is likely the council would be interested in adding to its portfolio, but the sites have to meet the same criteria as all other investment properties.
“We follow a stringent set of guiding principles under which the council will invest. As part of the acquisition process, the council follows a 14 point scoring criteria that ensures it considers all issues, i.e. the condition of the property, tenant financial standings, yield return and proximity to the district. For clarity, the council receives a market rental for the properties and it is in no way involved in the individual businesses operating from the properties.”