South Cambridgeshire District Council buys office block to raise money from rent
A council facing a £3million cut to funding in the next five years has bought an office block in a bid to generate extra funds from rental income.
South Cambridgeshire District Council bought the offices at 140 Cambridge Science Park for £13 million after councillors agreed the authority’s first ever investment strategy at a full Council meeting in February.
The Council’s latest budget, agreed in February, shows that it must find £3 million within the next five years to offset cuts to national funding. The purchase of this building is seen as a way to invest money now to generate funds in future. It is expected to provide a secure long-term income which the Council can reinvest in services such as recycling and waste, housing support and planning.
The building is being sold with tenants – the firm DisplayLink – in place. They have a 15-year lease from 2015. The rent generated by the building will provide South Cambridgeshire District Council with an initial net return of around 5.6%.
South Cambridgeshire District Council’s Lead Cabinet Member for Finance, Cllr John Williams, said: “We’re extremely pleased to have moved quickly to agree and complete this purchase. This investment will give us a good return which we will re-invest into frontline services for many years. An opportunity to buy an office in this world-renowned South Cambridgeshire location is rare and our recently-agreed investment strategy means we were in an excellent position to be able to capitalise on it. This purchase also means we have made a good start towards achieving our savings targets during the next few years. By making sensible investment decisions like this, we are helping to protect vital frontline services, like recycling and waste, housing support for vulnerable people and planning, in the face of cuts to national funding.”
The investment meets the objectives of the Council’s new investment strategy which was agreed at a full Council meeting on 21 February. The building is listed as Grade A office space – which means it is among the highest quality buildings on the market.
The building’s location, Cambridge Science Park, is widely considered Europe’s most successful research and development park. It is also well-served by public transport with the Guided Busway and Cambridge North railway station within a few minutes’ walk.
The two-storey building is ranked as “very good” by BREEAM – which is an international scheme to assess the sustainability credentials of buildings, such as energy, materials, transport and waste. To achieve a rating, a building is assessed by impartial experts to ensure it meets the scheme’s quality and performance standards.
The Council already generates around £2 million a year itself. In the past income had mainly been generated from Ermine Street Housing – the Council’s private sector housing company. By the end of March 2024, Council investments across a balanced portfolio are forecast to return an income of just over £5 million a year which will be used to protect the services local people want and need. A quarter of the money spent on services by South Cambridgeshire District Council is expected to be generated from the Council’s investments within five years.
More by this authorAlex Spencer