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Basingstoke raises property stake by £5m

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  • by Editor
  • in Uncategorized
  • — 6 Feb, 2019

Basingstoke 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.”

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