Value of council’s property portfolio drops by £900k

The value of Sedgemoor District Council’s property portfolio has fallen by more than £900,000 in a year, according to official papers.

According to a report, which went before the council’s executive last week (11 March), the local authority has a portfolio of five different commercial properties which cost a total of around £30.5m when they were first purchased.

The report estimates the total value of the portfolio has shrunk by £917,000 in the last year.

The portfolio includes the Street Retail Park, which was bought by the council in December 2018 for £8.24m, but it now estimates that it is worth around £7.7m, representing a loss of £476,000.

Sedgemoor also owns a TK Maxx store in Worcester High Street, which it originally bought for £8.5m and is now valued at £8.1m, representing a loss of £376,000.

The council’s portfolio also includes a unit on the Sowton Industrial Estate, near Exeter, which it bought for £3.9m and still has the same value.

The local authority also has two other properties in Bristol.

Sedgemoor is one of a number of local authorities to have invested in commercial property in order to generate income, after the money it received from central government was cut.

Last week, the government launched a consultation on the future of the Public Works Loan Board, which has been used by some councils used it to buy ‘significant’ amounts of commercial property.

According to the consultation document, which is available on the Treasury website, the government is consulting on revising the terms of PWLB lending to ensure that local authorities continue to invest in housing, infrastructure, and public services.

The consultation follows a report by the National Audit Office (NAO) in February, which showed councils in England have spent £6.6bn on supermarkets, office blocks and warehouses between 2016 and 2019.

According to the NAO, this is 14.4 times more than councils spent in the preceding three years.

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