Fri, 11 Nov 2016 | COMMERCIAL PROPERTY
Plymouth City Council has snapped up an 81,000 square foot retail park home to Dunelm and Hobbycraft as part of a strategy to promote the city’s economy and pour cash into vital services.
The investment in Friary Retail Park on Exeter Street, close to a “strategic gateway” to the city centre, was secured using historically low borrowing rates and gives the authority a long-term income stream, it said.
The freehold interest has been sold by AXA Insurance UK plc and AXA PPP Healthcare Ltd.
Plymouth Council has an investment portfolio worth around £80 million, bringing in an average of £6.7 million in rent every year from small shops, retail parks and industrial estates.
The authority is one of many local councils who are investing in commercial property to generate safe, steady income streams. This year, more than £1 billion has been spent on commercial property investments by authorities including Portsmouth City Council, Surrey County Council and Leeds City Council.
Plymouth Council’s leader Ian Bowyer said: “Lots of councils are doing this. As we all get used to diminishing funding from central government, we need to be entrepreneurial and look at other sources of revenue. We are already landlords of a significant amount of commercial property and have a good track record in maximising returns from our property estate.
“Taking over this park will also give some long term certainty for the existing tenants, which is good for their business, good for their staff as well as good for the wider city.”
The council estimates Friary Retail Park will deliver an annual income from rents of over £500,000 a year, growing over time.
“That’s half a million worth of savings we don’t have to make elsewhere and it will help us protect vital frontline services,” Mr Bowyer said.
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