There will be "a day of reckoning” for businesses in Wokingham that have missed rent payments during the coronavirus pandemic, a council meeting heard.

Last week, the government extended its ban on landlords evicting commercial tenants who are behind on their rent payments until the end of 2020, in a bid to protect jobs.

Wokingham Borough Council has borrowed millions to invest in a wide range of properties and has tenants on short and long-term leases.

The council predicts that £186,862 of the rental income it is owed will be ‘irrecoverable’ in 2020/21 and £93,103 is currently ‘at risk’, due to the impact of the pandemic.

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The income from these investments is reinvested in key council services, such as roads and social services, and used to pay off the debt and any interest.

At a council meeting on September 22, Damon Emes, the council’s real estate investment manager, said the government has made it “impossible” for landlords to use “lawful enforcement measures".

He added: “Our teeth have been severely blunted, in response to the government’s priority to protect tenants from heavy-handed landlords.

“We are using persuasion and positive relationships – a little bit of carrot and stick.

“We’re having to be patient, because rent that is due but unpaid today remains a debt and will be recoverable eventually.

“Our tenants who aren’t paying that rent are obviously helping sustain themselves through to the other side, when there will be a day of reckoning.”

The Conservative-run council says the pandemic has “added significantly to the pressure” on high street retailers and cafes and restaurants, meaning many are now struggling to pay their rent.

But the council insists it “is well protected from this key risk” because it has avoided making investments in these sectors.

Councillor John Kaiser, deputy leader of the council, says “a lot” of investments involve supermarkets because “people always need food and they are one of the more robust industries at the moment”.

Around 75 per cent of the council’s annual income from investments (£3.3 million) comes from ‘institutional calibre tenants’, such as Waitrose and Tesco, that have not struggled during the pandemic and can pay their rent in full.

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Another £1.2 million comes from investments seen as “higher risk”, but the council says “a relatively small” number of small, medium-sized and independent businesses have fallen behind on their rent and asked for support from the council.

Cllr Kaiser said the council decided to start making “prudent investments” three years ago, in response to huge cuts to council funding from central government.

He added: “The only investments we have made have been made with the conscious decision to only invest in the borough.

“Those investments have very much been around supermarkets.”

He added: “We do have some housing companies and those housing companies are really beginning to motor now.

“In the event we feel that commercial investment isn’t to our taste, we will look to invest more in housing, the majority of which will be affordable.

“I’ve made a commitment going forward to deliver 1,000 homes in four years, making a return of 5 per cent. We are really on target to do that.”

Wokingham Borough Council has agreed to invest £200 million in commercial properties and already invested £85 million.