Council buys new investment property to boost spending power
Forest of Dean District Council has bid successfully for the purchase of an industrial unit as part of an overall investment strategy to generate revenue which will help fund medium-term financial challenges.
Cabinet members ratified the decision to bid £1.505 million for the unit, located on the Lakeside Industrial Estate near Witney in Oxfordshire. They agreed that the purchase of the unit – which is occupied by a fuel company on a long-term lease - would enhance revenue returns in line with the Council’s capital strategy.
Commenting on the acquisition of the property, Cllr Richard Leppington, Cabinet Member for Asset Management, said,
"At a time when government funding is diminishing, this purchase will contribute towards making the authority more financially sustainable so we can continue to invest in front line services and community development. Acquiring this property highlights the council’s commercial aspirations.”
“This purchase makes sound economic sense as the return on equity is equivalent to 6.45%. We have set aside £5 million in total for property investment on the basis that it will enhance our revenue returns, fulfil our capital strategy and meet the challenges in our medium term financial strategy. We will continue to review the local market to identify further promising opportunities”.
Paul Jones, the Council's Chief Finance Officer, added,
“The taxpayers of the Forest of Dean can be assured that significant due diligence and negotiations went into this acquisition, which complements our existing property investment portfolio. Our focus for future investments will concentrate on the local market which demonstrates the commitment the Council has in the strength of Forest of Dean’s current and future economic prospects.”