Corby and Kettering councils have added to their growing property empire by snapping up another industrial unit in a £15.7m deal.
The two councils are now joint owners of the 240,000 sq ft unit in Brakey Road on the Weldon North industrial estate in Corby.
Both authorities – which now share an asset management team – borrowed money from the Public Works Loan Board to buy the building.
The unit was moved into recently by Yorkshire firm Advanced Supply Chain as a second site in Corby.
The purchase was discussed in an exempt report at the One Corby Policy Committee last month.
Corby Council’s head of property Jonathan Waterworth said the property is a good investment.
He said: “The gross return from the investment is around 6.5% and is a positive investment in an expanding local business.”
Kettering Council also kept the deal private, only informing councillors by email recently after the purchase had gone through.
The authority said the details regarding the purchase will be included in a finance report to the council’s executive next month.
This is latest property the two councils have brought together and adds to a portfolio which includes a Derbyshire warehouse brought for 14.8m and the Staples warehouse in Corby which cost £17.7m.
The councils have been making investments to try to bring in more income.
But Kettering independent councillor Jim Hakewill is concerned about how the councils are going about their business.
He said: “It frightens the life out of me that the borough council through the secretive asset management board are making very significant purchases without any scrutiny from backbenchers like myself.”
Councils across the country have been buying up investment property in a bid to prop up their budgets in the face of reduced grants from government.
The move has raised concern in some quarters including from the Chartered Institute For Public Finance and Accountancy which has warned that in some instances public services for vulnerable people are becoming dependent on how well the rental income in the property market is performing. Spelthorpe borough council in Surrey has spent £1bn on investments, which is more than 46 times its annual £22m budget.