Babergh and Mid Suffolk councils to pursue further £25m in out-of-county retail investment
- Credit: Archant
Fresh questions have been raised over two Suffolk councils’ investments after tens of millions of pounds have been pumped into retail sites outside the county – with a further £25million set to follow.
Figures published by Babergh and Mid Suffolk District Council said that the investment company CIFCO, which is jointly owned by the two authorities, has invested £25m in six assets in the last year, generating an annual income of around £1.4m.
The investments include the Marks and Spencer store in Brentwood, Essex, the building occupied by Caffe Nero and Wagamama in Peterborough and a business park in Milton Keynes comprising four car dealerships, as well as sites in Norwich and Harlow, Essex.
But the council has confirmed it is to invest a further £25m six months ahead of schedule, with the entire £50m portfolio set to bring in £2.8m a year, leading to fresh questions from the opposition about whether such a risky strategy is acceptable with public money.
Rachel Eburne, leader of the opposition said: “The concern that has not been addressed is that many of the high street retailers are suffering at the moment.
“This is public money so how is that risk being monitored and how are we being made aware of it?”
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Ms Eburne pointed to the well-documented struggles of firms like House of Fraser, Debenhams and Poundworld as examples of the risks, and added: “If they were investing in retail property in Suffolk you can support that, you can go and use that. But who goes shopping in M&S in Brentwood?”
The matter is set to be raised during the Mid Suffolk cabinet meeting on July 9.
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Concerns were also raised over the level of income, If the value of the investment remained the same it would take nearly 18 years for the investment to be returned in full.
Babergh’s Nick Ridley said spreading the investment reduced the risk, and said that 36 out of a potential 46 sites identified were ruled out to make sure they were “thoroughly scrutinised.”
Gerard Brewster from Mid Suffolk added: “CIFCO has now been trading for a year and is already generating a significant amount of income from a growing portfolio of investments, which is reinvested into council services, replacing previous funding from the government.”