Basingstoke raises property stake by £5m
0Basingstoke and Deane Council is to increase its commercial property investment.
The council is to raise its investment limit in property by £5m and reduce its traditional short-term treasury investments after what it describes as the success of its current strategy.
It will replace the short-term investments with £90m of property-related holdings, including a local housing development.
The money will not only generate income but also counter “local property market failure”.
The investment is forecast to generate returns in the 5% to 7% range.
Approximately £16m has already been invested in new properties and the net gain in value from them was £5.2m in 2017/18.
There are plans to invest £14m during 2019/20.
The council said it was confident about its strategy because significant reserves have been created to provide protection from temporary reductions in income levels.
It expects to have £145m of treasury investments by 31 March 2019.
A report to councillors said: “Whilst this approach is likely to increase the overall risk that the council is taking it is being taken within the context of a need to generate revenue income and a well-balanced portfolio of investments.”
