Ipswich Council’s commercial property company has spent millions of pounds to buy a business park to provide a new rental income for the authority – this time 90 miles away on the edge of Peterborough.
Ipswich Borough Assets (IBA) was set up four years ago to buy commercial property freeholds to provide the council with a rental income. Ipswich council is able to borrow money from the Public Works Loan Board at a low interest rate and lends it on to the company which uses the rents to provide the borough with an income.
IBA paid £22.5m for Peterborough Business Park, which is between the A1 and the city centre, and is expecting to pay the council £3m a year in income.
Until now all IBA investments had been in the Ipswich area. It owns the Anglia Retail Park at Bury Road in Ipswich, Birkett’s Providence House headquarters in Princes Street, and the Beardmore Park retail area at Martlesham Heath.
IBA chair and borough councillor Colin Kreidewolf had always said it was important to know the local economy when making investments – but said it was now time to diversify.
He said: “We felt it was right to spread our investments wider – both geographically and in business sectors. We have invested well in retail parks and town centre shops, this was an opportunity to buy a business park with very strong tenants with long leases.”
Among the tenants at Peterborough are major offices for Anglian Water and Associated British Foods. Mr Kreidewolf felt that despite the coronavirus crisis that had seen many office workers operating from home, there would still be a need for offices.
He said: “This is a very good site which is fully occupied. I think there will be changes in the medium term – but that could see businesses moving out of expensive offices in London to places with good transport links like this.”
The deal was questioned by Ipswich council opposition leader Ian Fisher who said councillors had not known about the borough’s decision to borrow £23m until now.
He said: “The loan was taken out on April 6 but we didn’t know anything about this until May 18. I don’t really know all the details about the deal, but I have lodged a complaint because we should have known about such a major deal.”
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