Ipswich Borough Council’s commercial property company Ipswich Borough Assets (IBA) has purchased the park in Lynch Wood, which hosts major offices for tenants including Anglian Water, Cummins Generator Technologies, and Associated British Foods.
IBA was set up four years ago to buy commercial property freeholds to provide the council with a rental income, but until now all IBA investments had been in the Ipswich area, and not 90 miles away in another city.
IBA chair and borough councillor Colin Kreidewolf had always said it was important to know the local economy when making investments – but said it was now time to diversify.
He said: “We felt it was right to spread our investments wider – both geographically and in business sectors. We have invested well in retail parks and town centre shops, this was an opportunity to buy a business park with very strong tenants with long leases.”
IBA owns the Anglia Retail Park at Bury Road in Ipswich, Birkett’s Providence House headquarters in Princes Street, and the Beardmore Park retail area at Martlesham Heath. Ipswich Council is able to borrow money from the Public Works Loan Board at a low interest rate and lends it on to the company which uses the rents to provide the borough with an income.
Mr Kreidewolf felt that despite the coronavirus crisis that had seen many office workers operating from home, there would still be a need for offices.
He said: “This is a very good site which is fully occupied. I think there will be changes in the medium term – but that could see businesses moving out of expensive offices in London to places with good transport links like this.”
The deal was questioned by Ipswich council opposition leader Ian Fisher who said councillors had not known about the borough’s decision to borrow £23m until now.He said: “The loan was taken out on April 6 but we didn’t know anything about this until May 18. I don’t really know all the details about the deal, but I have lodged a complaint because we should have known about such a major deal.”