South Somerset Council buys office block for £2.9m

South Somerset District Council has bought an office block in Milton Keynes for £2.92m.

According to the council, the purchase has been funded by money from the council’s reserves and internal borrowing from within the local authority.

‘This means that money that was previously in bank accounts is generating a higher rate of return with the proceeds used to protect services and deliver important projects in South Somerset,’ said the council in a statement.

‘It does not involve investing money that would have been spent on services.’

The property comprises 10,695 square feet of office space across four floors.

It is currently let to four tenants, including regional solicitors Howes Percival LLP, and situated in a modern business park environment half-a-mile from Milton Keynes Central station.

South Somerset has seen its core grant funding from central government cut by 70% since 2010, and it believes further reductions are likely.

In February, it bought another commercial property, Linden House, in the affluent Bristol suburb of Clifton, for £2.75m.

Both purchases form part of the council’s commercial strategy which aims to enable the council to be more commercial, business-like and generate income whilst remaining focussed on its core purpose – to support and deliver for our communities.

The council’s portfolio holder for economic development and commercial strategy, John Clark said: ‘The attraction of the property lies in its multi-let nature, which allows us to mitigate the risk of letting voids, while benefiting from capital and rental growth that infrastructural spending in the area typically brings to the existing market.

‘We are proud to be investing – not spending – in order to maximise income to the council.’

Last month, Mid Sussex District Council bought two retail units in a deal worth £5m to generate income for the local authority.

The council has agreed a deal to purchase the freehold of two retail warehouses on London Road, Burgess Hill, one of which is currently occupied by Halfords.

Photo by MagicDesk (Pixabay)