THE borough council has revealed the price it paid for a town centre hotel after the Gazette asked for it to disclose the exact figure.

As previously reported, Basingstoke and Deane Borough Council have bought the Premier Inn, in Victoria Street, to add to its property portfolio.  

The council said the investment will give 'a good rate of return' to support essential local services.

The Gazette can now reveal that the council paid £8.7million for the hotel.

The council previously said that the hotel generates a rental income of £417,000 per year - meaning that it would take around 20 years to see a return on their investment. 

The hotel was previously aquired by CBREi from Fishron Developments (a joint venture between Lamron Estates and TA Fisher) for £7.6million in 2015. 

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At that stage the property was set to Premier Inn on a 25-year lease. Construction of the hotel was completed in June 2015 and opened for business in mid-July. 

The Gazette asked the council how much it purchased the hotel for and the current lease length. 

Basingstoke and Deane Borough Council's head of property and assets Martin Jones said: "Basingstoke and Deane Borough Council acquired this investment in the borough for £8.7million, which generates a rental income of £417,000 per annum with consumer price index linked rent reviews and the lease has an unexpired term of 18 years.

“The purchase was funded out of council reserves, is part of the council’s property investment strategy and the council were professionally advised by chartered surveyors JLL."

Since hearing the news about how much the purchase has cost council leaders have been reacting to the news.

Leader of the Basingstoke and Deane Independents group Cllr Paul Harvey said: “We don’t know whether it will be worth it yet because we need to know all the details.

“We need to know why the council has purchased a hotel, which is a new building and what place does it hold in the council’s strategy for the future of the town centre. We need to know why they have done this and spent so much taxpayer’s money buying another hotel and helping another hotel in the town centre. There are important questions about whether it has been brought for the purposes of investment and whether the return be worth it for the taxpayer. We need these questioning answering.”

Meanwhile Cllr Andrew McCormick who leads the Labour group said: "It's a bit of a shocker because this was done under devolved powers and voted through in February's full council budget meeting. The first most councillors heard about it was through the press.

"The council is becoming a landlord first and a public service provider second. The council spent a similar amount on the Village Hotel in Basing View. While the £417,000 a year revenue is welcome, it will take over 20-years to recoup the initial outlay.

"The council needs to get its priorities right: sort out the town centre, ice rink, aquadrome, and help the football club get a bigger venue.

"We also have nearly £5,000 on our waiting list for housing. Frankly I would rather see us spend £10million building council houses and receiving the rent."

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The leader of the Liberal Democrat group Cllr Gavin James seemed more supportive.

He added: "It represents a decent deal for the council with a return approaching five per cent, far stronger than most financial investments. 

"I am sure the critics will soon be offering ideas on how to spend the £417,000 windfall this deal delivers every year."