Fri, 31 May 2019
WEST Berkshire Council has spent more than half-a-million pounds on commercial property advice.
The budget-squeezed local authority has spent £502,150.29 on property consultants to help it choose which shops, warehouses and offices to buy.
Faced with a reduction in central government funding, the council borrowed £100m from the Public Works Loan Board to invest in property.
It hopes to use £2m rent from tenants each year to spend on public services.
The £1.25m-a-year interest from the loan will be paid out of the rental receipts it anticipates it will receive from the properties.
The council spent £45,083,000 on acquiring seven investment assets, which includes £9,760,000 for The Sector at Newbury Business Park and £8m for 4 The Sector.
lt also purchased Dudley Port Service Station in Tipton, West Midlands, for £3,510,000, while Unit 1&2 Hill View Road, Guisborough, occupied by an Aldi and Iceland, was acquired for £6,048,000.
Shopping units at 303 High Street, Lincoln, were bought for £5,665,000, along with 2 Waterside South in the town for £2.9m.
An industrial unit at 79 Bath Road, Chippenham, was also acquired for £9.2m.
The nature of the scattered investments has been questioned by the Liberal Democrats, with Jeff Brooks (Lib Dem, Thatcham West) saying that the council should be investing in local housing and businesses.
He said: “These may not achieve the same returns, but would provide social gain to West Berkshire residents in terms of our local economy and housing stock.”
And with more big shops on the high street struggling, Mr Brooks also questioned whether the retail sector was a prudent investment at this time.
He said: “Retail developments may not look as attractive in future years or continue with the same yield as expected.”
Most of the money spend on advice for the purchases, spent since 2017, went to Montague Evans, who have received £494,650.29.
Jones Lang LaSalle received £7,500.
The figures were obtained following a Freedom of Information request.
Council spokeswoman Peta Stoddart-Crompton said: “Given that the council has acquired £58,677,000 of assets, the total fee to date represents 0.84 per cent, which is good value for money.”
Councils have been forced to look elsewhere for funding as, since 2010, the Government has cut 60p out of every £1 for local public services, according to the Local Government Association.