April 17, 2019 1.50 pm This story is over 29 months old

West Lindsey raking in £1.1m a year from commercial properties

The authority’s tenants include a Travelodge, a lingerie factory and a gym

West Lindsey District Council is making a £1.1 million a year return on its commercial property investment, it has been confirmed.

At a meeting of the authority’s Audit and Governance Committee, chairman Councillor Giles McNeill praised a 7.27% return (gross yield) on its £15,984,447.

He told councillors this was a massive increase on the 0.42% return it was getting on properties when he first took the chair in 2013.

One of the properties is a Travelodge in Keighley.

He said the investments had achieved their target a year earlier than the 2020 deadline.

It still means, at the current rate, the council would be waiting 14 years to get back the money it’s spent.

Following the meeting, Councillor McNeill told Local Democracy Reporter Daniel Jaines: “It’s great to be getting a million pounds a year. It’s a lot of money.

“When you think we have lost more than £4 million from the Revenue Support Grant… we are able to fill that largely without going into using our own resources.”

A £3.17 million building purchased by WLDC which is currently leased by a lingerie factory.

West Lindsey put aside £30 million, borrowed internally, for property in a bid to tackle a £4 million shortfall in Government grants.

The council now has totals for each of the properties it has bought, including both the cost of acquisition and extra amounts such as legal fees.

It has so far spent £15.9 million – with previous investments since April 2017 including, Unit 1, in Heaton Street, Gainsborough (£1.15 million), a hotel in Keighley (£2.49 million), two units in Sheffield (£5.87 million) and Unit 5 Sanders Road, in Gainsborough (£6.47 million).

The £2.545 million building purchased by WLDC which is currently rented by Better Gym.

At the time of purchases the buildings were rented out to businesses including Boyes, a Travelodge, Better Gym, Panache Lingerie and Coveris Flexibles.

The money has also been used towards funding the new crematorium in Lea and the leisure centre in Market Rasen.

The council previously stated it receives a market rental for the properties and is in no way involved in the individual businesses operating from the properties.

The purchase of the Coveris building by West Lindsey District Council cost £6.47 million.

An officer said no further properties were currently directly being looked at, however, the council would continue to seek opportunities for investment.

The authority says it has a stringent, 14-point scoring criteria including included lot size, location, asset quality, tenant lease terms and covenants.

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