WEST Berkshire councillors held a secret meeting recently to decide whether to invest tax payers’ cash into a commercial real estate venture.
Details of a possible property bid have been withheld from the public as the council, understandably, looks to protect its commercial position.
It is known that the local authority is ready to invest as much as £50m overall and as much £12.5m on any single property, having enlisted real estate consultant Montagu Evans to identify potential investment opportunities across the UK.
However, the council has refused to divulge even the vaguest of details from the meeting, such as the broad location of the building or whether senior council members have indeed given the go-ahead for the bid.
Leader of the Liberal Democrats on West Berkshire Council, Lee Dillon, said he was disappointed with the council’s lack of transparency and criticised the decision to hold the entire meeting in ‘part 2’ – which prevented the press and public from attending.
He said: “Whilst I appreciate commercial sensitivity, I believe aspects of that report needed to be in part 1.
“The council need to be as open and transparent with the public as possible, whilst protecting our commercial position.
“My comments will be going to the panel to be considered and I hope in the future they do it in a more transparent way, whilst still protecting the commercial position of the council.”
The Newbury Weekly News understands the cash-strapped local authority is potentially looking to invest in commercial buildings, including high street retail outlets, warehouses, supermarkets, petrol stations and student accommodation throughout the UK.
The council last year announced its intentions to invest up to £50m in commercial property as it looks at ways of generating new revenue streams following a huge reduction in its grant from the Government.
The capital funding for the venture would be borrowed from the Government’s Public Works Loan Board (PWLB).
However, the council has been criticised for delaying its decision to delve into the commercial property market, with many other local authorities now boasting significant property portfolios.
These criticisms were echoed by Newbury-based property consultant Richard Deal, of Deal Varney, who questioned the council’s timing, while also warning that such ventures were not a “golden ticket” to a guaranteed revenue stream.
“They are coming into it quite late,” he said. “Why? Only they can answer that question.
“But now I think prime investments and the better yields may have already been claimed by some of the more aggressive buyers in this market.”
Mr Deal, who has over four decades of experience in the industry, also said without proper experience and expertise in managing such properties, public investors could end up in trouble if the market changes.
He said: “They can’t just buy these properties and stack them on the shelf and forget about it and collect the income.”
“The risk for West Berkshire Council is they do not have the staff in the property development team to run these developments.
“One would suggest they would have to use outside resources, which again will be at a cost.”