Swansea Council has become a property investor, generating new income to be ploughed into its public services.

Its new property investment strategy has just produced its first deal – and more will follow.

The new income will help the delivery of council services. Local authorities across the UK have seen significant drops in Government funding and Swansea Council is aiming to become increasingly commercial.

Cllr Clive Lloyd, the council’s cabinet member for service transformation and business operations, said:

“This innovative new strategy will see us invest wisely and securely in Swansea commercial property.

“We will invest around £5m a year, taking great care in selecting properties based on the quality of their tenants, locality and sector. We know the market in Swansea and we won’t take undue risks.

“The initiative reveals that we’re confident in the local market and, like many others, we’re eager to invest in Swansea and it’s big future.

“Our first success shows that we’re serious about property – and serious about raising our own funds to deliver Swansea people the council services they need and deserve.”

The council’s first deal, completed this month (note: May), relates to a Swansea Enterprise Park building on which it holds the freehold interest – the Fendrod Way local base of world-leading logistics firm DHL.

The property comprises a detached distribution warehouse of around 43,000 sq ft and a canopy of around 12,800 sq ft on a site of just over 4.5 acres.

The deal saw the council pay a one-off fee in return for DHL surrendering its existing long lease and committing to a new occupational lease.

DHL benefits from its new capital, the council from a secure, increased income stream and an attractive return on investment.

In the commercial property business, this common trade is known as a sale and leaseback deal.

Commercial property consultants Lambert Smith Hampton advised DHL on the sale.