A COUNCIL’s £1.33 billion property portfolio could be a ticking timebomb unless a reliance on a few high-value shops is reduced, it’s own property experts have warned.

Brighton and Hove City Council’s investments are too focused on just 15 key city centre retail sites, industry experts Cluttons have advised.

The authority has been advised to start buying up sites elsewhere in the country to lessen the risk to its portfolio. Experts warned threats to the high street such as rising business rates or online shopping could expose the council investment.

The advice was given in a recent review sparked by the controversial decision to sell downland sites.

The council’s property portfolio is made up of 60 per cent retail and 15 per cent office compared to a traditional portfolio of 40 per cent retail, 40 per cent offices and 20 per cent industrial.

The authority was also criticised for investing too much in “low quality properties” like suburban shopping parades and North Laine shops delivering lower rents, high repair costs and higher risk of tenant default.

Cluttons conceded the investments had social benefit in supporting independent traders but advised selling and replacing them with fewer higher quality, seven-figure properties over the next decade.

Cluttons suggested the council use the same public lender backing the i360, the Public Works Loan Board, to help fund investments in expensive real estate.

It also suggested the authority set-up its own business to quickly pursue purchases while the market remained buoyant because waiting on decisions by councillor-led committees could take too long.

Cluttons told the panel: “The council’s portfolio is very high risk and so investors would require a much higher return in compensation. The council could be sitting on a timebomb.”

A council spokeswoman said there were “complex legal and governance arrangements” to be resolved before councillors could decide whether to set-up a property company or invest outside of the authority’s boundaries.

She added: “Our property portfolio is currently performing well. Its current performance shows that it is performing above comparative benchmarks in the market.

“We’re very aware of the need to diversify and ensure the long-term sustainability of our property portfolio. Our property asset investment strategy, aimed at rebalancing the commercial portfolio over the next five to 10 years, will address this.”