Plans have been approved for Uttlesford District Council to put its commercial ownership share of Chesterford Research Park up for sale.
The council acquired a 50 per cent stake in the life sciences research park in 2017 as an alternative means to generate income, in the face of diminishing council funding.
This research park is one of seven property assets in a £250m commercial investment portfolio, that was purchased mainly through external borrowing.
The loans are repaid from the rent paid by the tenants, who also pay the property running costs. This profit then brings money into the council to be used on services for residents and businesses.
Last year, the council agreed that it would look to sell one or more of the assets, depending on market conditions.
The council bought the 50 per cent share of Chesterford Research Park for just over £47 million, and has invested a further £16 million in refurbishing and rebuilding some of the 11 main buildings on site.
Work has also started on another large building that will house up to 16 companies, and the first phase of a solar farm, while a second, similar-sized building is planned to start construction in the autumn.
Due to a thriving life science market, the Chesterford Research Park asset is now worth far more than the £63 million the council has invested in it.
Market indications suggest life science assets are approaching their peak value, making now the right time to sell.
Cllr Neil Hargreaves, portfolio holder for finance and the economy, said: "The whole basis of the portfolio has been as a commercial asset for revenue return, with the intention that assets were bought and sold at the right times to benefit the council’s financial interests.
"Now is the right time for the council to cash in on the success and huge growth in value of Chesterford Research Park.
"Obviously, we will only sell if we get the right offer for this hugely valuable asset, as we have just agreed a balanced budget without needing to rely on any sale income.
"The decision to sell is a hard-headed business decision that will deliver the best financial benefit for residents and is not being done, as has been suggested by some, on a need to sell basis.
"The council takes external professional advice on all aspects of its commercial portfolio including from an independent member of the Investment Board who is an expert in this field."
Sale proceeds will be used to reduce the council's short-term borrowing on other assets in the portfolio, reducing exposure to fluctuating interest rates.
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Cllr Hargreaves added: "The commercial portfolio continues to be very successful and is worth substantially more now than the total sum paid.
"It has contributed over £14m, after borrowing costs, to support council services since 2019.
"It has also enabled us to spend £1m on the Covid business recovery programme, £1m on climate change initiatives and £450,000 on large-scale sports grants – without the commercial assets none of this would have been possible."
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