County council goes on another buying spree snapping up a Tesco site in Cambridge for £51.4m and industrial land in Peterborough for £11.5m
- Credit: Archant
Months after shelling out £6.5m for three restaurant units and a cinema in Wisbech, Cambridgeshire County Council has spent £51.4m for a 986 year lease on a Tesco site in Cambridge.
The council has also shelled out £11.5m to buy a 10 acre industrial estate in Peterborough.
Cllr Josh Schumann, chairman of the commercial and investment committee, described both as "sound investments" in different sectors and in different parts of the county.
The seven acre site which houses Tesco is in Cheddar's Lane, Cambridge, is off the Newmarket Road, where the store was built in 2002. It has parking for 530 cars.
A council spokesman said: "The current lease has 10.5 years to run, with index linked annual rent increases - which will give the council a 4.5 per cent return on its investment -with expected rises to almost 6 per cent per year by the end of the ten years.
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"Tesco has the right to renew its lease in ten year blocks up to 2059. The central Cambridge location and length of the lease make it an investment which is much sought after by investors."
This lease is guaranteed by Tesco PLC and is a full repairing lease meaning the council has no liability to maintain or repair the building.
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In Peterborough, the Kingsbridge Centre in Sturrock Way, is home to the UK headquarters of both E-Leather Ltd, a global materials technology company, and Finnings (UK) Ltd, the world's largest distributor of Caterpillar products - with lease agreements up to the next 15 years.
The return on investment for the site is currently 6 per cent, says the council.
Council leader Steve Count said the Tesco site would be "much sought after for another commercial tenant or even for redevelopment" should the supermarket ever decide to leave.
He said: "And in Peterborough, we are benefitting from a different type of investment in an industrial estate in a highly sought after position with excellent transport links - and two highly successful business tenants who bring high value jobs to the area.
"This represents a good rate of return in line with our investment objectives and will help us to continue to provide high quality services to the people of Cambridgeshire".