'Paper' loss does not affect Ipswich council's income from property - Ellesmere

Anglia Retail Park.

Ipswich Borough Assets spent money improving Anglia Retail Park. - 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."

Building site of the new Burger King in Anglia Retail Park.

Ipswich Borough Assets built a new unit for Burger King on the Anglia Retail Park. - Credit: Sarah Lucy Brown

Many investments have struggled over the last year - as anyone with savings linked to the stock market will know.

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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.

Colin Kreidewolf

Colin Kreidewolf said he had seen many changes during his career in commercial property management. - Credit: Charlotte Bond

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."