Pembrokeshire County Council is to discuss the possibility of making a near £1m purchase of a building situated in Tenby’s town centre as a potential investment opportunity.

The proposal to spend in excess of £950,000 on the premises at 6 Tudor Square, which currently houses the ground floor retail chain Peacocks, will be discussed in private at the authority’s cabinet meeting at County Hall on Monday

It is understood that the retail chain has recently signed an unbroken lease until 2030. The building described as ‘a prime freehold retail investment’ by Cardiff-based commercial real estate agency E.J. Hales could be an investment opportunity for PCC.

The company has stated that they are looking for offers in excess of £950,000 for the property. The building’s current rent is £48,000 a year, with fixed uplifts to £55,000 in 2020 and to £60,000 in 2025, which would translate to a net equivalent yield of 5.8 per cent.

Commenting on the matter, Clr. Bob Kilmister, PCC’s Cabinet Member for Finance, said that the proposal to acquire the building was currently an ‘officer’s recommendation’ based on the likelihood that confidential information concerning the owners may be aired.

“Cabinet has to decide if that is the case and I am sure this will be raised before a decision is made. All Cabinet members have to declare any interest.

“The Council has sold some investment properties which provided income which helps to finance services. These were sold for a variety of reasons and that amounts to nearly £2 million over the last two years. That money is sitting on deposit getting 0.5 per cent as it cannot be used for running services.

“We are attempting to purchase investments in Pembrokeshire only, where other local authorities are making investments outside of their Counties.

“The income we generate can be used for running services and therefore reduces the need for Council Tax. We are not borrowing any money. “Local Government finance is very difficult to understand and I can fully understand why people do not understand the position. The investment return on this building is 5.8 per cent but it is all dependant on survey and other due diligence.

“There is no risk free investment but the assessment is that this will provide a good return on investment. This is still subject to surveys etc which are critical,” he added.

When discussing the proposal at Tuesday night’s meeting off Tenby town council, the Deputy Mayor, Clr. Mrs. Christine Brown told her colleagues that initially, she didn’t understand such a potential purpose, when PCC were facing a £21m deficit, and every community and town councils were facing severe service budget cuts, but following further dialogue with the town’s two county councillors, Clr. Mike Evans and Clr. Michael Williams, she accepted the explanation on how PCC can’t use money from the sale of assets to offset revenue expenditure so are using that money to buy other more profitable assets to give them an annual income which can be then used for revenue purposes.

“The Tudor Square property would be a reasonable risk, but the retail company has a good track record, and 5.8 per cent would be generated toward our revenue services,” commented Clr. Williams, who represents Tenby’s North ward on the county council.

PCC’s cabinet recently voted unanimously to back a plan to purchase the former Ocky White premises in Haverfordwest, with council leader Clr. David Simpson calling the decision to buy the building ‘a leap of faith’.