An extra £700,000 a year is set to be generated for Island residents following the first two investments for the Isle of Wight Council’s new property portfolio.
The surplus income will come from letting the two properties in Salford, Manchester and Aylesford, Kent – and the money will go towards protecting key services for Islanders.
The properties have been bought by the council for £19.5 million borrowed from the government’s Public Works Loans Board. The annual rents will bring an income of £700,000-plus after borrowing costs are taken out.
“We pledged that these investments would be thoroughly researched and undertaken in accordance with strict risk-based criteria. This has happened – and with these first two properties we will begin to see real benefits for our residents,” said Councillor Stuart Hutchinson, Cabinet member for resources.
“These purchases are part of our £100 million property investment strategy approved in September last year – designed to generate extra income for the council while minimising risk.
“All the extra money will go towards our savings targets and helping to avoid cutbacks to services.”
Factors including capital protection, rental return, market sector, location, lease length, building structure, transport links and accessibility have all been built into the planning.
“We are acting prudently and responsibly on behalf of Island residents with these investments, and will continue to look at further acquisitions subject to the relevant government guidance,” said Councillor Hutchinson.