Ipswich Borough Assets (IBA), the company set up to develop an investment property portfolio to provide an income for the Borough Council, has announced two more acquisitions.
IBA was established in April 2016 and now has a total of five completed purchases, which is set to bring the Council of £1.8 million in the next financial year.
The acquisition of properties by IBA is funded by loans to the company from IBC. Loans to the company are at commercial rates in accordance with regulations and the Council benefits from a margin between the interest rate it borrows at and the interest rate it lends money at to IBA.
The latest transactions are the purchase of Anglia Retail Park and 17-19 Cornhill.
IBA has bought Anglia Retail Park for £42 million – completion took place in December. Within months, the retail park will be 100% occupied and produces a rental of almost £3 million a year.
In November, IBA purchased 17-19 Cornhill from Kent County Council for just over £3 million. Burtons / Dorothy Perkins has an existing five-year lease, with a rear car parking area let to NCP.
The other three transactions are the purchase of law firm Birketts’ new HQ in Princes Street for £12.5 million. The HQ, which is being built by development company Churchmanor Estates, will be competed this spring and become home to more than 250 staff. Birketts has signed a 25-year lease and will pay rent to IBA.
IBA bought the freehold of Portman House from Archant in December 2016 for £2.15 million and leased it back to the publishing company on a 15-year lease.
In March 2017, IBA completed the purchase of Europa House (formerly Billingtons) in Europa Way for nearly £3.5 million. Billingtons, as expected, vacated the property when the lease expired in September 2017 and IBA has received a new offer for occupation once refurbishment of the site has taken place. This will bring 100 jobs to the town and the possibility of many more – the tenant, which must remain confidential due to commercial reasons, is discussing the possibility of extending its operation on to neighbouring land owned by the Council.
Together, these five transactions represent an investment of over £63 million by Ipswich Borough Assets and will produce an income stream in excess of £4 million a year. This, in turn, will provide a valuable income stream to the Borough Council of £1.8 million in 2018/2019.
Council Leader David Ellesmere said this would help to protect frontline services – the forecast income is almost equivalent to the net cost of providing sports services and bin collections.
IBA Chair Colin Kreidewolf said: “All the purchases have taken place in Ipswich and meet the company’s goal of supporting the economic development of the town. In particular, the Princes Street transactions have contributed to the regeneration of this key link between the town centre and the railway stations and have provided headquarters for two major employers in Ipswich.”