Don’t get your knickers in a twist, but West Lindsey District Council has invested £5.5 million in two new properties currently housing a gym and a lingerie factory.
The purchases, completed last week, were for two freehold properties in Sheffield, and will see the council collect the rent from individual businesses.
The first, on Penistone Road, is currently occupied by Better Gym. It was bought for £2.455 million, with a rent of £164,000-a-year.
The second, a unit on Drake House Crescent, is currently leased by Panache Lingerie. This set the council back £3 million, while the rent will be £275,000-a-year.
The move follows last year’s purchase of a £2.35 million Travelodge hotel in Keighley, West Yorkshire. That property currently brings the council a rent of £159,430-a-year.
Councillor Giles McNeill, chairman of the council's governance and audit committee, took to Twitter to say he was ‘pleased’ to see the additions to the council’s portfolio.
He added: “We’ve made investments of just shy of £8 million and are generating a return of £598,000 p.a. (7.58 per cent) far better than the return of 0.43 per cent we were earning on our investments in 2012!”
The council has put aside £30 million to build an investment portfolio, which it says is part of a financial plan to combat the future loss of government money.
Alan Robinson, strategic lead for people and governance, said the potential income from rent and future resale ‘will enable further investment in West Lindsey to support services, economic regeneration and growth’.
He said: “This income is vital in providing much-needed revenue for the council, supporting the continued provision of services in West Lindsey.”
He offered reassurance that the council follows a ‘stringent set of guiding principles’ when it invests, including a 14-point scoring criteria looking at factors such as the condition of the property, tenant financial standings, yield return and proximity to the district.