Leeds City Council has invested £65m in property specifically to generate an income since 2010 but, like many metropolitan authorities, its history as a landlord goes back to the 19th century.
Leeds First Direct Arena
Source: Stephen Bowler
The council’s director of city development Martin Farrington told LGC that as the largest owner of land and property in the city the council’s investment strategy was focused on capturing the value that the council was helping to create in the city.
For example, during the recession it stepped in to bring forward the city’s First Direct Arena on land it owned when no other developers were willing to take the risk. The council now receives an income from the venue which is let on a 25-year lease.
The council’s most significant purchase since 2010 has been 150,000 square foot of office space opposite the train station for £43.7m. The council had sold the land on which the facility was built, formerly a car park, but retained an option to purchase the finished building if the business case stacked up. Although the income generated is similar to that from the car park, it is tenanted by law firm Addleshaw Goddard, which, together with KPMG next door, now provides modern offices for more than 1,000 high quality jobs in the city centre.
“The council could have chosen to simply maintain its income from a low grade surface car park. Instead we brought the land forward for new office development to help stimulate growth in the city,” Mr Farrington said.
Income from the council’s investment properties is used to fund further economic regeneration.
Mr Farrington added: “Our investments are based on a strong financial business case. As a large metropolitan authority we are in a good position to be able to identify opportunities where we can make investments that capture the value that we have helped to generate.”