'Paper' loss does not affect Ipswich council's income from property - Ellesmere
- Credit: Sarah Lucy Brown
Ipswich council leader David Ellesmere has insisted that the £14million loss reported by its property investment company is only a "paper" figure to cover the reduction in the value of many commercial buildings during the Covid pandemic.
He said Ipswich Borough Assets was continuing to provide more than £3m a year to the council which helped to compensate for the reduction in central government support and ensure there did not have to be deep cuts to services.
Much of the "loss" was down to commercial assets being revalued down because of the pandemic which had seen more people working from home and therefore little demand from employers for new office space.
Mr Ellesmere said: "That is only a paper loss. It only becomes a real loss if you sell an asset and get less for it than you paid in the first place - and IBA is not selling assets at this time."
He said IBA had actually done better than other property firms over the last year.
IBA chair and borough councillor Colin Kreidewolf said the loss also reflected the fact that IBA had invested considerable sums in its assets over the last year.
He said: "We have done a lot of work at Anglia Retail Park, building the new Burger King, updating the old Pizza Hut so Tim Horton's can move in later this year, ensuring the Bounce unit was made ready for Jump In after the first company ceased trading."
Many investments have struggled over the last year - as anyone with savings linked to the stock market will know.
- 1 Police release CCTV after wallet stolen from Aldi store in Ipswich
- 2 Covid rules reintroduced at Ipswich school after cases surge
- 3 'Outstanding' former Ipswich teachers leave £2million to charities in will
- 4 Woman's bank cards used minutes after being stolen in supermarket car park
- 5 Aldi looking for new site in north east Ipswich
- 6 Ipswich man denies multiple rape offences as trial begins
- 7 Drunk driver nearly caused head-on crash driving on wrong side of the road
- 8 Cinnabon chain coming to A14 service station
- 9 'I want to train as HGV driver but there are so many delays'
- 10 Ipswich man led police on 55 mile chase at 120mph
But both Mr Ellesmere and Mr Kreidewolf said IBA's record was much better than the industry average. Mr Kreidewolf said: "We have been to the independent tribunal that sets rents and have seen a considerable increase in what we receive from some of our tenants.
"This is a long-term investment and we are confident in the future."
The total value of IBA's assets is currently estimated at just over £119m and loans from the council, which originally came from the Public Works Loans Board at a low rate of interest, cover 97% of that asset value.
Mr Kreidewolf added: "I have been involved in commercial investment industry for more than 30 years. When I started we had the boom and crash in 1987 - and there have been many other ups and downs. You have to take the long-term perspective and that's what we're doing."