A significant new property investment acquisition by Swansea Council is to help it deliver top class services over the coming years.
The council has bought two city centre multi-storey car park leasing investments – and will now collect rent from the tenant for at least the next 19 years.
NCP, the UK’s biggest car park operator, is committed to long term leases and will continue to operate and maintain the premises in Orchard Street and The Kingsway.
Both Kingsway and Orchard street car parks are significant city centre assets providing 328 and 512 car parking spaces respectively.
The council’s fresh stream of income from the new occupational lease will provide an attractive return on investment. The deal also ensures the council can continue to collect ground rents from NCP.
Cllr Clive Lloyd, the council’s cabinet member for service transformation and business operations, said:
“We already own the freehold on these NCP sites; now we’ll get a better return which equates to a net return of 7%. As the rental streams are linked to a combination of compounded and Retail Prices Index (RPI) increases, there is also guaranteed rental growth.
“It’s long-term, secure income and that’s excellent news for our council tax payers. This new money will go straight into us continuing to deliver top class services at a time when our funding from central government continues to fall.
“The deal reiterates the council’s confidence in Swansea city centre. Investing in two strategic, prime sites shows the public and other investors that we want to drive people to our city centre and make it a thriving location for business, leisure and living.”
This is the second deal in the council’s ongoing property investment strategy. This summer, the council acquired a 43,000 sq ft industrial property on Swansea Enterprise Park, let to logistics firm DHL.
The strategy’s 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 partly redress this by becoming increasingly commercial.
Property consultants JLL advised the council on the NCP acquisition.
Justin Millett, director in JLL’s Cardiff office, said: “This is great news for Swansea, securing the future of some core car parking facilities.
“Just as importantly, the council acquires an impressive, long-term return on investment for local taxpayers.
“Local authorities across the UK have spent around £4bn on commercial property assets in the past five years with their primary focuses including regeneration and the replacement of lost government funding to protect frontline services.
“JLL is pleased to support Swansea to select the right investments and to achieve maximum value. Alongside the council, we remain on the lookout for further investment opportunities in the Swansea area.”
Property consultants Knight Frank acted for the vendor in the Swansea NCP deal.