Suffolk councils buy properties in Milton Keynes and Epsom
- Credit: Google Maps
A property investment firm owned by two Suffolk councils has spent £6million on two new properties, set to bring in hundreds of thousands of pounds income per year.
But fresh concern has been raised over the strategy, with opposition councillors calling for the money to instead be spent on housing.
CIFCO Capital Ltd was set up by Babergh and Mid Suffolk district councils to purchase properties that would generate an income and therefore prevent cuts to frontline services.
That company has come under scrutiny for some of its retail investments, as retail is seen as a risky market, as well as buying properties mostly outside of Suffolk.
READ MORE: The properties owned by CIFCOThe latest properties to join the company's portfolio are the Honda dealership in Milton Keynes and the Renaissance House office block in Epsom.
Bought for a combined £6m including fees, the council said those two properties alone would generate around £350,000 per year income, with the whole CIFCO portfolio of 14 properties bringing around £1.4m a year income after costs.
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Assistant director of assets and investments for Babergh and Mid Suffolk district councils, Emily Atack said: "CIFCO exists to generate an important alternative source of income to the councils and makes a significant contribution towards the costs of providing council services to our communities, without us having to make cuts or impose even higher increases to council tax bills.
"Every acquisition we add to CIFCO's portfolio is scrutinised to ensure we are making wise and careful investments that will bring the highest returns for our residents for the lowest risk.
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"We have a thorough process in selecting potential acquisitions and for every purchase we make, over 50 other options are rejected.
"We are looking for the best investment opportunities, ensuring we have a balanced portfolio in terms of geography and sectors - making sure we don't put all our eggs in one basket.
"This means the right opportunities for CIFCO, in terms of income generation alone, are often out of area - but this doesn't mean that we are not also investing within Babergh and Mid Suffolk.
"You only have to look at our regeneration-based investments within each district: major commercial developments such as Gateway 14, leisure centre improvements, retail and leisure developments and house building to see that property investment out of area and regeneration investment within our districts go hand-in-hand, with one supporting the other."
Negotiations are continuing over another property, which has not yet been disclosed.
READ MORE: Calls to axe CIFCO investmentsMid Suffolk's opposition Green group questioned why those buildings were not being bought by authorities in those areas if they were worthwhile investments, with the group's leader Rachel Eburne saying: "Fundamentally councils should not be acting as property speculators."
She added: "Our view is they should be investing in Mid Suffolk and really doing a lot more to invest in housing, and ensuring that existing housing tenants - both private and council - are fully energy efficient, well insulated and ensuring our own housebuilding programme is as energy efficient as possible.
"I am also disappointed they are continuing to search for properties to invest in outside the county."