Southampton City Council to raise money via real estate

  • 2016-11-17
Council chiefs in Southampton are poised to generate funds by investing in real estate.

Southampton City Council intends to allocate £65 million to the purchase of real estate. The aim of the initiative is to exploit low interest rates. A printing company within Southampton Hedge End could be used to produce documents supportive of the strategy.

The local authority Plans to buy hotels, offices and retail parks. The main goal of the idea is to help address financial pressures on the council. There may be a degree of risk involved, but the vision has been assessed as realistic by those in favour.

Simon Letts, the current council leader, is confident that the proposal can lead to genuine returns. Councillor Letts estimated that investing in property could give the local authority an additional £1 million each year.

The potential success of the scheme does rely on the Public Works Loan Board. This body can lend money at an interest rate below 3%. The rate in question compares favourably with a level associated with private corporate lending which is nearer to 6%.

The city council has already purchased two properties in Winchester Road. These retail warehouses in Southampton are currently occupied by Halfords and Wickes. However, the council wants to extend its portfolio geographically. It aspires to secure a hotel within Tewkesbury in Gloucestershire.
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