Sheffield becomes property hot spot for other councils
Sheffield properties are being snapped up by other councils as investment opportunities.
One Lincolnshire council has bought two industrial units in Sheffield and says the rent it collects will help it tackle impending budget cuts.
West Lindsey District Council (WLDC) has invested almost Â£5.5 million for two freehold properties - one of which is leased by the famous Sheffield company Panache Lingerie.
It spent Â£3milllion on a unit on Drake House Crescent, currently leased by Panache, and says the rent will bring in Â£275,000 a year.
The second unit is on Penistone Road and is occupied by Better Gym. It was bought for Â£2.4m, with a rent of Â£164,000-a-year.
Sheffield Council says it does not own any properties outside the city and has no plans to invest in any.
But other councils see it as an innovative way to raise money ahead of Government cuts to local authority funding. WLDC says the income from the Sheffield properties could pay for a new swimming pool in three years time - a project which had previously been shelved because it couldn’t afford the running costs.
WLDC has also bought a Travelodge hotel in Keighley and has put aside Â£30 million to build an investment portfolio.
Councillor Giles McNeill, chairman of WLDC’s Governance and Audit Committee, said: “We’ve made investments of just shy of Â£8m and are generating a return of Â£598,000 per annum which is 7.58 percent - far better than the return of 0.43 percent we were earning on our investments in 2012.”
The council says the income from rent and future resale ‘will enable further investment in West Lindsey to support services, economic regeneration and growth’.
The City of Lincoln Council has bought a Travelodge building in the city for Â£13 million. And Boston Borough Council and East Lindsey District Council have both taken out extensive loans for capital project, but have not yet made investments.