A Babergh district councillor has insisted its investment arm remains a viable income stream, despite multi-million pound losses over the financial year.

The losses were highlighted during a joint Babergh and Mid Suffolk overview and scrutiny committee meeting looking at the latest report of the councils' joint property investment company, CIFCO.

Its purpose is to generate income for both councils by investing in property in order to provide services to the residents of both districts.

Cllr John Ward

CIFCO was set up in 2017 and its income represents a large part of both councils' financial yields, at 11 per cent of Babergh's total income and nine per cent of neighbouring Mid Suffolk's.

In the report, it was revealed that, due to high inflation and growing interest rates, the value of the company's portfolio fell 12.34 per cent to more than £82m — nearly £12m lower than the first quarter of 2022.

Cllr John Ward, the cabinet member for finance, assets and investments for Babergh, said the loss in value only serves to assert the council's commitment to store these properties as a long-term investment.

The company's portfolio is made up of 21 assets, with 81 tenants spread across the UK, 41 per cent of which is within the eastern region, the worst performing of which was its asset in Braintree, falling more than £2m.

Despite this, both the chairman Sir Christopher Haworth and the councils are confident about the company's performance as it still compares favourably to the overall fall in value of 17 per cent measured by the MSCI All Property Index.

He said: "The whole market has seen capital values decrease, but we are still outperforming the industry benchmark and have a robust portfolio and business plan in place that will see us continue to generate income for our shareholders.

"We also continue to identify opportunities to improve the quality and sustainability of our existing properties – so we are not only creating rental income growth but also reducing the environmental impact of our portfolio."

The report also outlined the company's focus for the next year, which includes the mitigation of the amount of time a property is without a contract, improving its environmental footprint, and minimising risk.