Council’s £ 15million property investment fund expenditure disclosed

Many of us are looking for a good little employee and Swansea Council is no different.

Five years ago, the labor administration created a property investment fund to purchase assets such as parking lots, business units and other buildings that would generate a financial return.

And, behind the scenes, the board has quietly landed leases for seven of those assets since 2016.

Investment decisions have been made behind closed doors, but the board has, following a Freedom of Information request from the Local Democracy Reporting Service, confirmed it has spent £ 14,915,000 to date . This amount excludes stamp duty, court costs and agent fees.

The seven leases are for multi-storey car parks at Orchard Street and The Kingsway, the Quay West building at Quay Parade and four plots at Swansea Enterprise Park. The council already had full ownership of these sites.

In its response, the board said: “The fund was created with a view to acquiring sites of strategic importance and of potential for future regeneration / redevelopment and to generate a stable financial return from rental income.

“One of the benefits of the fund is that it allowed city council to modernize some of the buildings, where appropriate, to provide rental opportunities for small and medium-sized businesses that were in demand but not readily available.

Rental income, he added, also contributed to frontline services.

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The three most expensive acquisitions were £ 4.1million, £ 2.8million and £ 2.5million.

The fund has a board of directors that monitors and discusses new opportunities. Purchases are subject to Cabinet approval and for acquisitions over £ 1million the Cabinet makes the final decision.

Financial rules and regulations must be followed, and opposition parties can ask to review proposed acquisitions before a decision is made. The council said it had not received any such requests to date.

Opposition Leader Cllr Chris Holley said he had reviewed the acquisitions with council finance officers. He said he couldn’t go into details but said the feedback “was very good and in line with business expectations.”

Cllr Holley added: “The only caveat is that revenues could now be affected by the pandemic.”

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