A local authority in Essex has invested millions in a research park in the hope it will provide a ‘stable income stream’ as central Government cuts council funding.
Uttlesford District Council has announced a new partnership with Aviva Investors following the purchase of a 50% share in Chesterford Research Park.
The Park is 900,000 sq ft and contains mainly biotechnology and pharmaceutical research companies.
The council said the £45m purchase forms part of its long-term plan to realise a portfolio of commercial investments capable of generating a ‘stable income into the future’. It warned this was necessary as ‘funding from central Government diminishes.’
To fund the project, the council is using its own reserves along with a mix of loans from other local authorities, the Government and private funders. The arrangement will generate an initial yield of 5.6% per annum for the council rising to 6.3% by year five.
‘Chesterford Research Park is one of the premier commercial sites in Uttlesford and has excellent potential for further growth,’ said the council’s chief executive Dawn French.
‘We are delighted to be working with Aviva Investors on this initiative and look forward to playing a key role in the continued success of the Park.
‘Maintaining a financially sound and effective council is one of the council's priorities, and we are confident this investment will be of significant benefit for residents and businesses, as well as those with a specific interest in the Park.
‘It will go some way in helping us to bridge the funding gap which will, in turn, enable us to continue to deliver important services to our communities.’
Photo: ©Thomas Nugent