WARRINGTON Borough Council leader Russ Bowden says the council’s property investments are performing well, despite the challenges of the Covid-19 pandemic.
The council has 15 properties in the North West, and the latest figures show that property investment is currently bringing in a gross income of £30m a year, as well as providing major regeneration benefits for the Warrington. This income is reinvested in the town and helps to protect key council services.
At the same time, the aggregate value of the council’s commercial properties, based on the most recent valuation, has increased by 2% over the last year.
The investments are also a key part of the council’s work to support Warrington’s ongoing regeneration, boost employment opportunities and drive economic development in the town.
Major council property investments which are performing well include:
·The Council’s investment in local regeneration and economic growth at Birchwood Park. Alongside building new properties to let at the park, bringing in £2 million of LEP funding, this investment has attracted new businesses to Warrington, generating new jobs and opportunities for local people and associated supply chain businesses. This has strengthened the park as a regional business centre, as well as providing diversification to support the nuclear employment hub in Birchwood.
·The Council ownership and support has enabled the re-occupation of a vacant building, Stanford House in Birchwood with a new long lease to British Telecommunications securing new jobs in Warrington.
In the last quarter of 2020, despite the impact of Covid-19, the council also collected over 95% of rent on demand, which external advisers have described as “exceptionally high.”
One of the reasons these investments have held up so well during the challenges of 2020 is that the council has focused on logistics and food retail. These property classes have proved very resilient, even seeing some rental and capital growth in the last 12 months. The council has also avoided investing in high street retail and avoids investments with very high returns, as they carry the most risk.
Alongside its property investments, the council has also invested in two solar farms, in York and Hull, which are already delivering environmental benefits, supporting the council’s Climate Emergency work and its commitment to reduce its carbon emissions to zero by 2030.
In its first year of operation, the Hybrid Solar and Battery storage facility in York has saved over 10,000 tonnes of carbon, and has generated forecast Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in the region of £550,000 for 2020/21. The Hull Solar Farm, which became operational in November 2020, has saved over 1,000 tonnes of carbon, and from 1 April will provide 100% of the Council’s own requirements for electricity. This will make Warrington Borough Council the first local authority in the country to generate and supply all of its own green energy.
Warrington Borough Council Leader, Cllr Bowden, said: “Over the last five years, we have cautiously and prudently adopted a property investment strategy. All of our investments have been carefully considered and all acquisitions are backed by extensive due diligence and external professional advice.
“This is now paying dividends, with investments that are performing very well and generating millions in additional income for the council.
“The huge cuts in government funding, along with increasing demand for services, means it’s vital that we continue to be innovative with our finances. Without our investments, we would have no choice but to cut essential services that we all rely upon, including some of the most vulnerable in our communities.
“Just as importantly, our property investments are supporting economic development and regeneration activity in Warrington. As a council, we have a wider responsibility to build a better future for local people, so these investments are not purely financially motivated – they also allow us to maintain an influence in shaping the growth of our town and deliver social, environmental and employment benefits for Warrington.
“What’s clear is that the COVID pandemic has provided a really stern test of our property investment portfolio. It’s very pleasing that these investments have proven to be so resilient.
“At the same time, these are assets which we could sell, if this was the best thing to do, so the overall increase we are seeing in their value is very encouraging and bodes well for the future.”
Warrington Borough Council’s property investment portfolio is monitored on a regular basis, and involves internal council officer groups from professional backgrounds, external independent professional consultants and audit teams.
The cost of borrowing at the town hall is currently circa £1.6b which has sparked criticism from opposition members and Warrington South MP Andy Carter.
There has also been much concern about the council’s accounts not being signed off by the auditors for the past three years and criticism of some of the council’s investments, including Redwood Bank and out-of-town properties.
Other investments include Matalan, Warrington, Pure Gym, Warrington, Eddie Stobart, Stretton Green, New Balance, Birchwood, Tesco, Farnworth, Tesco, Widnes, Appollo Leisure Park, Gemini, Asda Hulme Movianto Haydock and Sainsbury’s in Sale.
