'The Isle of Wight Council has borrowed more than £19 million from the government to invest in property.
The figures have been revealed by the Bureau of Investigative Journalism as part of an investigation into council finances, which revealed some of the smallest councils in England have tied the future of their public services to the uncertainty of the property market.
Experts warn commercial property investments are volatile and if councils are financing them through borrowing, this could be even riskier.
However, Deputy Leader and Cabinet member for Resources, Cllr Stuart Hutchinson, said he tried to minimise all risks when deciding which properties to invest in.
The council contracts with Portsmouth City Council for fund management and acquisition services.
“There is a risk in everything but we look for high value property, occupants with strong financial standing, and in strong growth areas with good transport networks.”
IWC paid 24 per cent above the asking price
The Isle of Wight Council purchased two properties — both industrial units — one in Salford for just over £10 million, and the other in Kent for £8.6 million.
For the Salford property, the council paid 24 per cent above the asking price.
Out of the fifteen units, one does not have a tenant.'
Read more: Isle of Wight council paid 24 per cent above asking price for property investment