Directors for a council-owned company that has controversially invested millions of pounds in property outside Suffolk says it has no immediate plans to pump more into town centre retail.
But it emerged that "sub-sectors" of retail such as local supermarkets, trade stores and drive-ins were likely to be of interest.
CIFCO Capital Ltd, a property acquisition firm set up jointly by Babergh and Mid Suffolk district councils, has come under fire for its investment strategy because 11 of its 12 properties were outside Suffolk.
There had also been concern raised that it included retail - the Marks and Spencer store unit in Brentwood and the Caffe Nero and Wagamama unit in Peterborough - which was a risky market.
Company directors were quizzed at a joint scrutiny meeting of the two councils on Monday, where they confirmed that town centre retail was not on the horizon, but retail "sub-sectors" like drive-ins were.
The focus will continue on warehouse and office properties, which bosses said were generating the best yield.
"It's a really secure portfolio," said company chairman and non-executive director Chris Haworth.
"We are operating in a market where things change so it's very important we are fleet of foot in how we invest funds."
Mr Haworth said the company invested in different areas of the country and different sectors to help spread the risk, and went through a diligent process of assessing properties to make sure they were suitable.
It is understood around 70 properties were considered and 12 invested in since its formation last year.
Both councils approved a loan of £25million each in this year's budgets for the firm to invest, which helps bring in an income of around £1m to each council that prevents cuts to services.
Since December, another four properties have joined the portfolio - Westpark House offices in Southampton, Omron offices in Milton Keynes, Lutea House offices in Brentwood and the DW Fitness building in Lincoln.
Data supplied to the committee said 59% of the portfolio was made up of buildings based in the east.
Neville Pritchard, director of Capital Markets JLL which advises the CIFCO board, said: "Retailers have taken on a lot of debt over the years and they are finding it very hard, so in general we are taking the view we should be focusing much more in the office and especially the industrial and alternative sectors.
"We are quite happy with the retail investments we have but we are not looking to put more in at this time."
It was also confirmed the firm had been looking at potential hotel investments as well.
Councillor Kathryn Grandon said: "I am a bit surprised we are looking at that area [retail] anyway.
"One of our main investments is in M&S and we know they are going through difficulty at the moment.
"They could well be looking at organisations such as ours for rent reductions."
Mr Pritchard said CIFCO met with its tenants every six or eight months to find out if there were any imminent risks, and pointed to the Brentwood M&S being the third best store of its size within the company.
However, the Chartered Institute of Public Finance and Accountancy (CIFPA) last year warned councils should not be borrowing "in advance of their needs purely in order to profit from the investment of extra sums borrowed," and said that "a local authority should avoid exposing public funds to unnecessary or unquantified risk".
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