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Councils agree CIFCO Business Plan for 2019/20

Babergh

Councils agree CIFCO Business Plan for 2019/20

Babergh and Mid Suffolk District Councils have this week approved CIFCO's future plans, looking to increase the £1.4m annual income it already generates for the districts' through property investment - the equivalent of increasing council tax by more than 12%.

CIFCO Capital Ltd, which is wholly owned by Babergh and Mid Suffolk District Councils, was established in 2017 to generate income through property investment which is then ploughed back into council services within the districts to offset reductions in funding from central government.

At Babergh and Mid Suffolk full council meetings on Tuesday and Thursday respectively, councillors agreed CIFCO's business plan for 2019/20, which will now form the basis of its trading over the next 12 months - including the investment of a further £50m agreed by both councils back in February.

Cllr David Busby, cabinet member for assets and investments for Babergh District Council said: "CIFCO's business plan has won cross-party support in Babergh, with our quality investments returning a generous rental income that we can plough back into the district. In the longer term we also expect these investments to show capital growth, meaning a win/win for the council and our services for residents."

Cllr Suzie Morley, cabinet member for assets and investments for Mid Suffolk District Council said: "This is great news for Mid Suffolk. We often hear the accusation we should be investing in our own districts rather than in property elsewhere - but it's not ‘either/or'. The rental income we receive from the properties is reinvested within our districts, enabling us to invest in local regeneration and in meeting the needs of our residents."

The plan, also endorsed by the Joint Overview and Scrutiny Committee earlier in July, describes a "strong first full year of trading" but CIFCO chairman Chris Haworth admits that the board has had to contend with a changing market.

"This year has presented a number of challenges, in particular the disruption in the retail sector and the growth in the warehouse sector, driven by the expansion of on-line shopping. This has meant that the board has had to consider acquisitions very carefully to reflect this changing market," he said.

Each potential acquisition is carefully considered by an expert team of advisors and where target acquisitions are deemed too risky or not cost effective they are not pursued. While 12 properties were acquired, dozens more were ruled out.

The current portfolio of 12 properties is spread throughout the east of England and balanced across commercial sectors to minimise exposure to any one sector or location. The changing market is now expected to be reflected by a shift away from retail property and towards office and industrial sectors instead.

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