WEST Berkshire Council bosses do not regret the decision to invest £63 million in commercial buildings even though property values are expected to drop during the pandemic.

The Conservative-run council has borrowed millions through a low-interest government loan scheme and used the money to buy buildings such as offices, banks and shops.

It then rents those buildings out and uses the profits to fund key council services.

West Berkshire Council has already invested £63 million and it expects a net return of around £1.26 million (two per cent) a year.

READ MORE: Empty £8 million building could finally welcome first tenants

The Office for Budget Responsibility predicts that the price of offices and commercial buildings across the country will fall by nearly 14 per cent this year.

If that’s correct, it will reduce the value of West Berkshire’s property portfolio by around £8.8 million.

But councillor Ross Mackinnon, executive member for finance, said the council is not concerned about that prediction because it intends to keep hold of the buildings for several decades.

'It doesn’t matter what the overall value of the building is'

“We’re not concerned about the capital value of the property because we’re not looking to sell it,” he said.

“In a sense, it doesn’t matter what the overall value of the building is in the interim if you’re not planning on selling it.

“We’ve got no plans at all to get out of those investments.

“As long as the rental income keeps coming in, then they are fulfilling their purpose.”

Between April and June, all of the council’s tenants paid their rent in full, said Cllr Mackinnon.

But between July and August, the council collected 83 per cent of the rent owed.

“There’s a small collection deficit, but we still expect to collect that,” said Cllr Mackinnon.

“That’s where tenants have come to us and asked for a small rental holiday.

READ MORE: Family of man who died in West Berkshire crash pay tribute to 'loving son and brother'

“83 per cent is actually very good. The average commercial rent income paid nationally is 46 per cent.”

He also said the council has invested “in a range of different types of building” and most of them are outside of West Berkshire.

“If you spread your investments across the UK, then you’re protecting yourself against local market conditions,” he said.

“If you invest everything in Newbury and the Newbury economy goes down, then you’re exposed to a lot more risk.”

The council had planned to invest £100 million in commercial property.

But that project was put on hold earlier this year after the government raised concerns about councils using low-cost loans from the Public Works Loan Board to buy property.