Plymouth City Council are set to benefit from an additional £325k a year, thanks to a significant commercial property investment.
The council have purchased the freehold interest of the Royal Mail Regional Mail Centre in Plymstock as part of a long-term investment strategy to generate a substantial income stream.
The 21 acre site is made up of three separate buildings totalling 199,000 sq ft; a purpose built sorting centre/delivery office, a call centre and a vehicle maintenance unit and is secured against a quality tenant, the Royal Mail.
Councillor Ian Bowyer, Leader of Plymouth City Council said: “I’m really excited to see this crucial piece of real estate added to the Council’s portfolio.
“The Regional Mail Centre is very important to the city and will deliver a substantial return on investment, while at the same time supporting local jobs.
“We are already landlords of a significant amount of commercial property and have a good track record in maximising returns from our property estate.”
The property is situated on the Breakwater Industrial Estate approximately two miles east of Plymouth city centre in an established mixed commercial and residential area on Breakwater Road.
Royal Mail’s lease lasts until 2032 and all the buildings are critical to their operation in the South West.
The site is forecast to deliver the council an average annual net income of around £325k a year, which will go towards funding frontline services.
The Council has an existing investment portfolio worth in excess of £130million. Every year an average of around £10 million worth of rent comes into the authority from these properties which range from small shops and retail parks to industrial estates.
The Council were advised by external Chartered Surveyors JLL and Savills in the acquisition.