Investment company CIFCO has today announced the £2.9m purchase of a GPs’ practice.
CIFCO, which is wholly owned by Babergh and Mid Suffolk District Councils, has completed a deal on a property in Nottingham, which consists of a health centre and neighbouring hairdresser.
The purchase brings the total number of properties in the CIFCO portfolio up to 15 – and further diversifies its range of tenants to minimise exposure to any one sector, tenant or location during the ongoing Covid-19 crisis.
The majority of its properties are based in the East of England.
CIFCO was established jointly by Babergh and Mid Suffolk Councils 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. Since its launch, almost £3m has been reinvested into council services.
Rental from the new acquisition will further increase the £1.633m of net income that the councils received for 2019/20 –equivalent to 10 per cent of the councils’ annual staff costs or a 13.5 per cent increase in council tax.
The returns received from CIFCO allow the councils to meet loan repayments plus provides extra income on top at a time when the virus has significantly affected other traditional income streams, such as council tax and business rates.
Despite fears that the coronavirus pandemic would leave CIFCO exposed, the company has succeeded in making all repayments to date in full, citing rigorous risk management and a diverse portfolio for helping them collect a higher proportion of rent from their tenants than the current industry average.
Having already received endorsement by cross-party Joint Overview and Scrutiny last month, the company is now due to present its third annual business plan to councillors at Full Council meetings this week, detailing its performance over the last year and its investment strategy for the forthcoming year – with industrial and office space as the main targets for investment.
CIFCO Chairman Sir Christopher Haworth, said: “Our business plan is setting the parameters for investment over the next 12 months meaning we can move swiftly, invest wisely and continue to bring in income for the councils to support service delivery and aid the districts’ recovery post-Covid.”
The plan will go before Babergh District Council tomorrow (Tuesday) and Mid Suffolk District Council on Thursday. Both council meetings will be streamed live via the councils’ You Tube channel.