WARRINGTON Council’s executive board has tonight (Thursday ) approved the proposed purchase of Birchwood Park from Oaktree Capital Management.
Although the council has not revealed the purchase price it is believed to be circa £200m, making it one of the largest property acquisitions in the local authority investment market.
Occupying a regionally-significant location in the east of the borough the 123-acre business park at the junction of the M6 and M62 motorways consists of 1.2million square feet of accommodation and is currently let to more than 150 businesses employing more than 6,000 people.
Detailed information remains commercially sensitive, but the council’s investment is expected to deliver a substantial and secure income stream for many years – income that will go straight back into supporting the delivery of essential public services.
It is one of a number of property investments the council has started to make since experiencing government cuts of more than £90million since 2010, with the council mhaving to save an additional £30million by 2020.
Property acquisition, led by Warrington & Co, has become a cornerstone of the council’s investment strategy as it seeks to find the revenue to protect residents from the worst of the cuts.
Councillor Russ Bowden, executive board member for finance, said: “In common with all our investments, the proposal on the table has been subject to rigorous scrutiny. We will act only in the best interests of Warrington and the advice from external consultants provides assurance that this acquisition is a prudent investment.
“The benefits to the council, the taxpayer and the borough are significant because the money we make from our capital investments is used to help run services. Realistically, this is the only way we can plug the gap between increasing demand from residents and reduced funding from the government.”
In December 2012 the council approved a capital funded strategic property acquisition fund in order to strengthen both the authority’s finances and its ability to influence strategic development within the borough.
The council now owns a number of assets locally, ranging from small neighbourhood retail and commercial units to town centre commercial properties. Warrington & Co helped the council acquire three properties within the last 18 months – those currently rented by Pure Gym, DW Sport and Matalan.
Councillor Bowden added: “People might ask ‘how can the council afford to buy property when budgets and services are being cut?’. The truth is, we can’t afford not to.
“We make investments using capital funding – money with very low rates of interest that can be used only to invest in long term projects or to buy assets which will generate income in the future. This is known as ‘invest to save’.
“Historically, property has proved to be one of, if not the best, investments in terms of capital growth over the last 50 years. The right investments generate a steady income stream.
“This is a major development opportunity within a growing regional market and a good deal for Warrington. We will seek to maximise opportunities throughout the business park through continued investment and strategic asset management.”
The council will retain the services of the business park’s existing facilities management company Patrizia.
For more information about Birchwood Park visit http://www.birchwoodpark.co.uk/
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Could this be the new warrington hospital