Swindon Borough Council owns property worth £1 billion

A report has revealed the local authority's total property holding was valued at £1.048bn at the end of 2019.

Nearly half of that is in nearly 11,000 council houses and flats at £490m. Of the rest, schools make up a significant portion of the rest at £160m.

The remainder of the portfolio is split between its own operational buildings – which either the council or its partners use – and about 540 non-operational commercial buildings, which it lets out to make an income.

Those buildings are valued at £187m if they were to be sold on the open market and they bring in £6.5m of income every year.

The council owns 80 building it works from and there are about 360 properties it lets to partners delivering council services – such as Sandford House in John Street, which is let to Voluntary Action Swindon.

There are some interesting properties among the offices, industrial blocks and shops owned by the council.

It owns 19 farms and 11 other agricultural holdings and is continuing to invest. At the start of 2020, the council bought the IO Trade Centre and the next-door Equity Trade Centre in Hobley Drive, Stratton St Margaret.

One of the council’s major investments is in the new headquarters being built by Zurich at the Kimmerfields site. That was the council’s land, which it has sold to the financial group.

But when the building is completed net year, the council will buy the building back for £38m. It will rent it back for at least 20 years and expects to bring in £1.8m a year in rent.

Cabinet member for the town centre Dale Heenan said: “When construction has finished in two years’ time, and Zurich employees have moved in, the council purchase the building and lease it back to the company for an annual rent.

“At no cost to taxpayers, with the minimum of risk, it is a commercial deal based on professional expert advice that we should explore more often.”

A report to members of the resources and corporate overview and scrutiny committee said the rent received by the council during the coronavirus pandemic has been hit hard.

Head of property management at the council Kathy Sherratt expects a revaluation of many of the council properties this year – especially car parks – to show a drop in value because they have brought in significantly less income.

But she told members officers in the property team had made a decision to try and keep tenants in place, and there had not been an increase in vacant properties despite the pandemic and lockdowns.

She said: ”There is a three to five per cent vacancy rate – you’ll always have some voids when it comes to a commercial portfolio. But those vacancies are not because of Covid-19.”

Ms Sherratt told the councillors the commercial property team had done a lot to keep tenants in the council’s buildings over the last year, revising contracts and rent deferrals to make things easier.

She said: ”We wanted as many of our commercial property tenancies to stay in business as possible.”

A new property policy was agreed in February and the council’s plan is to target more industrial properties – especially the retail warehouse sector with a lower priority on office buildings.

Its preferred value of property to buy will be between £2m and £10m.