Bor­ough coun­cil paid £21m to buy Sains­bury’s Oak­ley land

Gloucestershire Echo - - NEWS - By ROBIN JENK­INS

CHEL­TENHAM Bor­ough Coun­cil paid nearly £21mil­lion to buy land Sains­bury’s is on in the Oak­ley area.

Last month, the au­thor­ity re­fused to re­veal how much it had paid or who it had bought the land in Pri­ors Road from, say­ing the mat­ter was con­fi­den­tial.

But af­ter the Gloucestershire Echo sub­mit­ted a Free­dom of In­for­ma­tion Act re­quest, it has said it paid £20,724,000 to Her­mes Prop­erty Unit Trust for the site.

And the coun­cil has also re­vealed that the pur­chase, which was the largest it has ever made for a sin­gle prop­erty, was one of four it has made in Chel­tenham this year.

It bought of­fice ac­com­mo­da­tion site El­len­bor­ough House for about £17m, Caffe Nero in High Street for about £1.2m and of­fice ac­com­mo­da­tion in Rod­ney Road for about £1.7m.

It is part of plan to boost its rental in­come from prop­erty it owns, in or­der to make up for the fact that is get­ting less money from the Gov­ern­ment.

While the coun­cil has owned prop­erty, such as the Re­gent Ar­cade, for many years, it is look­ing to in­vest fur­ther in or­der to earn more in rent and help plug the gap in its finances.

Ex­ec­u­tive di­rec­tor of fi­nance and as­sets, Paul Jones, said it was through a com­bi­na­tion of bor­row­ing and us­ing some of its re­serves.

The four prop­er­ties have been added to the coun­cil’s prop­erty port­fo­lio, which is worth more than £600m.

Its debt, or mort­gage, on that is £112m - about £60m of which re­lates to its hous­ing stock.

Mr Jones said the money would be paid back over vary­ing pe­ri­ods, rang­ing from a year to 40 years.

But, cru­cially, he said the amount of money the coun­cil re­ceived in in­come from its prop­er­ties was “sig­nif­i­cantly” more than the amount it spent on ser­vic­ing its debt.

And the net in­come it would make per year on its lat­est four prop­er­ties would be more than £600,000.

Coun­cil­lor Rowena Hay (LD, Oak­ley), the coun­cil’s cab­i­net mem­ber for fi­nance and as­sets, said in­vest­ing in prop­erty was a risk worth tak­ing and the money it gen­er­ated would pre­vent the au­thor­ity from hav­ing to cut its ser­vices. She said: “Rather than have cuts, we want growth. We need to be brave and bold to achieve that.”

Buy­ing the Sains­bury’s site was a rel­a­tively low risk in­vest­ment, she said, be­cause it was a suc­cess­ful busi­ness likely to op­er­ate prof­itably for many years to come.

And if it did close as a su­per­mar­ket, which the coun­cil did not want, it could use the land for hous­ing.

She added that tak­ing a risk with in­vest­ment was a pos­i­tive thing for coun­cils and was hap­pen­ing up and down the coun­try.

But the coun­cil, she stressed, was only in­vest­ing in land in its lo­cal area some­thing ad­vised by the Gov­ern­ment.

She said: “There was a time when coun­cils were very risk averse. Now we have be­come risk aware.”

Asked if the coun­cil planned to make any more ma­jor prop­erty pur­chases, Mr Jones said: “There is noth­ing more in the pipe­line at the mo­ment but if the right op­por­tu­nity came up, we would con­sider it.”

He added that since 2013, the au­thor­ity had spent £40m on new in­vest­ment. robin.jenk­[email protected]­

Sains­bury’s in Oak­ley, Chel­tenham

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