Kettering Council has spent more than £30m in the past 10 months on two warehouses and an office block.
The authority has taken out government backed long-term loans to finance the purchases which it has bought as part of a new asset management strategy to bring in revenue for the authority.
It spent £14.8m in March on a warehouse in Denby, Derbyshire, £17.7m last December on a joint deal with Corby Council to buy the Staples warehouse off Mitchell Road, Corby, and £1.17m on the Nene House offices in Pytchley Road, Kettering.
Meetings about buying the warehouses have been held in private due to ‘commercial sensitivity’ reasons. Another purchase of an undisclosed property is currently going through.
At an audit meeting on Tuesday (July 24) at the council offices in Bowling Green Road, Kettering, the authority’s head of resources Mark Dickenson gave councillors a run-through of the authoriry’s new purchases.
He said that as part of the asset management strategy, officers tested potential property investments against a number of criteria and then rated them before deciding whether or not to buy.
The three properties have netted the authority £333,000 in rental income in the 2017/18 financial year and are predicted to bring in £713,000 in 2018/19.
The warehouse on the Denby Hall Business Park is 144,095 sq ft, has 100 car park spaces and is rented by HL Plastics. Staples is 528,000 sq ft and is used as the stationery firm’s national distribution centre. It has parking space for 98 HGV vehicles as well as 300 cars.
Nene House has a telecommunications company and the Environment Agency as tenants.
At the meeting Labour’s Cllr Jonathan West questioned why the firms leasing the warehouses did not own them rather than renting. Mark Dickenson said it was because the companies did not want to tie up their capital in the building but wanted to use it instead to grow their businesses.
The council’s executive director Lisa Hyde told the councillors property buying was part of the council’s strategy to become self sufficient and ‘one of the eggs in the basket’ but that the authority was not solely relying on property investment to boost its coffers.
Also at the meeting the council’s internal audit and accounts were presented. Auditor Daniel Hayward from KPMG praised the authority’s accounts and said there were ‘no issues to note’ with the asset management strategy.
Sarah Ward, Local Democracy Reporter