Torbay Council says commercial properties lost £37m in value

Torbay Council has a large portfolio of property it acquired before the purchasing practice was outlawed by the government in 2020

Commercial property owned by Torbay Council has lost £37m in value while the portfolio continues to earn millions of pounds in rent, it says.

Councillor Chris Lewis said that without the rents, the council might have had to cut services "by millions".

Its property portfolio includes a Cornish pasty factory and an Amazon warehouse in Exeter.

The practice was outlawed by the government in 2020, preventing any further purchases.

When the properties were bought, the total value of the portfolio stood at £212m, but changes in the market mean it is now worth only £174.5m, latest figures show.

Leases expiring

However, Torbay's holdings continue to make money with the portfolio spanning the south and west of England, the Local Democracy Reporting Service said.

Its purchases began in 2017, using discounted loans to buy property and collect rents from them.

The council's scrutiny committee found income from rents in the last year topped £13.5m, nearly £800,000 more than when the properties were first bought.

However, the number of tenants' leases expire in the coming years, but the council said it was prepared to use its reserves to offer firms incentives to stay.

There was a suggestion the council might sell some of the properties, but cabinet member for finance, Conservative councillor Alan Tyerman for Churston with Galmpton, said: "Offloading them at a time in which capital values have fallen doesn't seem a very sensible thing to do.

"When they were purchased, the idea was that we might want to sell, but the changes in the regulations mean that if we sell, we can't replace that revenue."

'Real benefit'

Mr Lewis said the investments continued to "bring in millions of pounds a year"

"If we hadn't bought them we would have had to cut services by millions," he said.

"This has been a real benefit to the bay."

The authority's portfolio also includes Wren Park retail centre at Torquay, the shopping centre run by Tesco at Ferndown, Dorset and Gadeon House office block close to the M5 at Exeter, which is let to EDF Energy.

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