A planned £180 million splurge on commercial properties has been axed by Reading Borough Council (RBC).

The decision to stop investing in commercial property has been revealed in the council’s newly-released draft budget papers.

RBC spent around £75 million on four commercial properties from April 2016 to March 2019, with the aim of creating extra revenue which would help to prevent cuts to public services.

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Councillor Jason Brock, leader of RBC, said: “The council announced a review of its commercial property acquisitions earlier in the year and will now remove the scheme from its financial strategy.

“The portfolio we have acquired to date is suitably balanced and continues to generate revenue that is used to support service delivery for residents and gives the council a direct stake in the economic success and vitality of our town.”

The council had planned to spend an additional £180 million from April 2020 to March 2023 but has now abandoned this.

However, the council will spend £8.8 million on maintaining the value of its existing portfolio.

Back in October, a council spokesman said commercial investment would be put on hold and the council would review its commercial strategy.

At that point, the council “anticipated” the spending plans would be removed from the budget but would not confirm this.

The investment was described by Green councillors last year as “gambling taxpayers’ money”.

And the Office for Budget Responsibility (OBR) has now predicted the value of offices and commercial buildings will drop by almost 14 per cent this year.

The boom in online shopping coupled with a shift toward remote working during the pandemic has created lower demand for retail and office spaces.

The OBR has forecast prices falling by 13.8 per cent in the 2020-21 financial year before slowly recovering, rising by 0.9 per cent in 2021-22 and by two per cent by 2024-25.

RBC has estimated it will lose around £530,000 this year from reduced commercial property income due to the Covid-19 pandemic.

The council had hoped to raise around £1.5 million in total from the four properties each year prior to the pandemic.

While RBC is set to receive 75 per cent of its lost income during this year (2020/21) from the government due to the pandemic, investment in commercial properties is excluded from this.

What properties has the council bought?

RBC spent around £11 million each on Adelphi House, which is a Job Centre, and 160-163 Friar Street in 2016/17, also known as Reading County Court.

The council spent further £20.1 million on Kennet Wharf on Queen’s Road, which is Visa’s European home, in 2017/18.

Its final big purchase was a £32.9 million outlay on Four 10 Thames Valley Park in April 2019, home to pharmaceutical company Sanofi.

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All four purchases were funded through a loan from the Treasury-backed Public Works Loan Board.