A COUNCIL has taken its spending on commercial properties past £25m after buying two shops units for £11m.
Fareham Borough Council revealed yesterday that it had bought the units – let to Argos and Dunelm – at Southampton Road retail park in Park Gate, after weeks of talks between parties.
This remains a very good way to bring in funds as we can get incredibly low interest rates as a local authorityCouncillor Sean Woodward, leader of Fareham Borough Council
The multimillion-pound purchase has taken the council’s spending on its property portfolio to £26.5m, while the local authority says that the purchases bring in an annual income of £1.8m.
Councillor Sean Woodward, leader of the council, said that the investment strategy has been put in place in recent years due to central government reducing its funding for councils by over 50 per cent.
He said: ‘This remains a very good way to bring in funds as we can get incredibly low interest rates as a local authority.
‘By being creative, we have been able to achieve this despite seeing our government support reduce by over £3m per year and I’m very pleased to see this property purchase strengthen our portfolio even further.’
But there was criticism, as Councillor Shaun Cunningham, who represents the Liberal Democrats, said: ‘I’m concerned about the council spending this amount of money.
‘We’re living in very uncertain times, with no clear plan for Brexit and the future of the economy also unclear.
‘I think this is a very risky strategy that could go pear-shaped but I do hope that that does not happen.
‘However, I would not be making these decisions in the interest of the taxpayer.’
His Lib Dem colleague Councillor Katrina Trott added: ‘I support these purchases if the money that’s being brought in goes towards bringing in social housing or improving services.’
The council owns the Currys PC World and Halfords units at the Southampton Road retail park in addition to Clifton House in Segensworth, Sainsbury’s supermarkets in Eastbourne and Streatham, a Tesco in Ringwood Road, Poole, a Specsavers in St Thomas Street, Weymouth and a nursery in Littlemore, Oxford.
Portsmouth City Council has a property investment fund of £112m, and has so far bought five assets, including a Mercedes-Benz showroom in Eastleigh for £8.75m. It has come under fire for not buying property within the city council boundary.