Fareham Borough Council has today acquired a new commercial property, bringing the total number of properties purchased under the Commercial Property Investment Acquisition Strategy to eight. The purchase price of the new property at Southampton Road, Segensworth was £11m and complements other property interests that the Council already has on the retail park. This includes a site the Council has owned for many years which is let to B&Q and also occupied by Pets at Home, Home Bargains and Carpetright.
The portfolio now consists of:
The Investment Strategy was introduced at a time when bank interest rates fell to an historic low whilst, at the same time, Government funding for Councils reduced by over 50%. By moving a proportion of its investments into secure property, the Council has been able to lock in new, alternative income streams and protect funding for services.
Cllr Woodward said "We introduced the Commercial Property Strategy when it was clear that bank interest was going to remain at historically low levels. Coupled with the reducing Government support that was necessary to get the country's finances back on track, it was important that we sought new and innovative ways of sustaining our income streams to protect public services from cuts. 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."
The portfolio of properties that have been acquired for £26.5m, provides an annual income of £1.8m, which reflects a return on investment of approximately 7%. Three quarters of the value of the investments are within the Fareham Borough, but with the focus firmly aligned to quality and security, the Council has also acquired properties elsewhere in the UK.
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