South Cambs District Council invests £13m to buy Cambridge Science Park building rented by DisplayLink
The Cambridge Science Park premises occupied by DisplayLink are being purchased by South Cambridgeshire District Council for £13million as an investment.
The authority says it will reinvest the rent from the building back into frontline services as it seeks to find £3million in the next five years to offset cuts to national funding.
DisplayLink, a chip and software company which enables wired and wireless VR, monitors, docking stations and more, has more than 10 years to run on its lease of 140 Cambridge Science Park. The rent will provide the council with an initial net return of around 5.6 per cent.
Cllr John Williams, the council’s lead cabinet member for finance, said: “With our recently-agreed investment strategy now in place, this is an excellent opportunity to buy an investment property which will give us a return to plough back into frontline services for many years.
“It’s a bit like buying a house in that we have agreed to proceed with the sale, but it is subject to satisfactory surveys and the relevant checks being done and us happy with the results. “This is a rare opportunity to buy an office building, with tenants in place, in one of the world’s most prestigious science parks that sits right at the heart of one of the UK’s fastest growing economies.
“It is a positive for us that the premises sit close to home within South Cambridgeshire, and the funds generated by the purchase will go towards our savings targets during the next few years.
“The income generated by the rent will also help us to protect vital frontline services, like recycling and waste, housing support for vulnerable people and planning, in the face of cuts to national funding.”
Under the terms of the strategy agreed by the full council its meeting on February 21, any investments must be secure.
The two-storey building is listed as grade A office space – meaning it is among the highest quality buildings on the market - and is ranked as “very good” by BREEAM, an international scheme to assess the sustainability credentials of buildings, such as energy, materials, transport and waste.
The building also occupies a prestigious location on one of Europe’s most successful research and development parks.
By the end of March 24, a quarter of the money spent on services by the council is expected to be generated from a balanced portfolio of investments. It already generates around £2million, including income from Ermine Street Housing, its private sector housing company.