City council spends £9.5m on gym in Kent and 'cold store' in Corby
PUBLISHED: 06:00 21 October 2018 | UPDATED: 19:01 22 October 2018
Archant Norfolk 2018
Norwich City Council could have to wait more than 23 years to recoup almost £10m it spent on two commercial properties in Kent and Corby.
The council’s property asset list, which was updated in August this year, shows it has purchased a gym at Holmes Way in Ramsgate for £2.3m.
It also snapped up what is described as a “cold store” in Corby, Northamptonshire, for £7.2m.
Both costs include fees and taxes.
The council said it owns the freehold to the buildings, which are then let out to tenants.
The gross rental income for both properties combined is almost £400,000 per year.
It means it could take the council more than two decades to recoup the £9.5m it spent.
Mike Stonard, cabinet member for sustainable and inclusive growth, said the council was investing in property to make up for money lost through government cuts.
“Our choice was either to cut services or bring in more income,” he said. “We chose the latter.
“The council has owned property for many years which generates income from rent received which is invested in frontline services.
“But in view of the financial pressure on the city council and like many local authorities across the country, we decided to expand this portfolio.
“The purchase or properties outside of Norwich form part of this expansion. However, the vast majority of our portfolio is based here in Norwich.”
In April, the council purchased a block of shops on London Street, Norwich, for £9.4m.
And late last year it splashed out £6.8m buying Lloyds Bank on Gentleman’s Walk.
The council’s newly acquired property in Ramsgate is currently occupied by The Gym Group.
Norwich Green Party group leader Denise Carlo said the property was in an “out-of-town shopping centre”, which she objected to.
She added: “If the city council must invest in commercial property, it is preferable that it purchases properties in Norwich and Norfolk, rather than outside of Norfolk.”
“Moreover, the Green Party would rather that the council wasn’t investing public money in commercial properties and investing it instead in developing local projects that bring a social return.”
The city council said it used specialist surveyors to help source “suitable investment property”.
It said all properties have to undergo a rigorous selection criteria.
The council said it could sell the freehold in the future “with a high likelihood” of selling above the purchase price.