MONMOUTHSHIRE County Council (MCC) has purchased the freehold of the Newport Leisure Park, on the city's Spytty Road, for £21 million.

The 141,000-square foot property – adjacent to Newport Retail Park and the Tesco Extra supermarket – includes a 13-screen cinema, gym, Home Bargains superstore, indoor adventure park, and a range of restaurants such as McDonalds, Burger King, Pizza Hut and Harvester.

And following news of the purchase on Monday, Paul Matthews, Monmouthshire's chief executive officer, said: “ We are pleased to have secured a well-let, long income asset that will provide an excellent annual return for the Council and help us to sustain our wider service delivery portfolio in the years ahead.

"Newport Leisure Park serves a large catchment area in South Wales and taps into the long-term demand for experiential consumer spend and leisure activities.

"It is the latest addition to our commercial investment portfolio following our recent acquisition of CastleGate Business and Science Park”.

The purchase has been funded through borrowing, and MCC said the rents received would pay for the borrowing costs, as well as generating a net surplus which would be used to support "front-facing services".

Speaking to the Free Press on Tuesday, Mr Matthews said the council expected an initial net return-on-investment of 6.29 per cent.

When asked why MCC had decided to invest in sites in Newport, rather than in Monmouthshire, Mr Matthews said the authority was "limited to where viable commercial opportunities present themselves".

He added: "We considered a number of potential investments, however Newport Leisure Park was the best opportunity available to generate a revenue return and create a blended portfolio to mitigate risk exposure."

The Newport Leisure Park site is fully-let and includes 705 free car spaces and links through to the Newport Retail Park and the Tesco Extra on the eastern side of the city.

Earlier this week, MCC described the site as a "prime location in South Wales", citing numerous housing developments in the area and the proximity to the potential route of the planned M4 relief road.

But while MCC sees the acquisition as a safe bet on future returns, there has been a mixed reaction from readers. Some praised the council's foresight and willingness to work around shrinking budgets, while others called the move a "gamble" and a "very odd" investment.

These concerns were also raised by county councillor Armand Watts (Labour,Thornwell) who said the news had come as a complete surprise.

"They don't understand people are hurt by the council tax increase," he said, citing news of the 5.95 per cent rise announced by MCC.

"[MCC] is bleating all the time it's the most underfunded council in Wales, and now they've gone and spent £21 million.

"It begs the question of what the risk is to the public purse. They are a public service provider, not some Gordon Gekko venture capitalists."

Cllr Watts also said MCC was "fundamentally rubbish" at capitalism, based on losses recorded after concerts in Caldicot Castle and the community interest company CMC2.

"Why not spend the money on more immediate things like stopping teachers being made redundant or the crisis in adult social services?" Cllr Watts asked.

When asked what MCC had to say to people who thought the acquisition of the leisure park was a gamble, Mr Matthews told the Free Press: "In order to maintain our valued front-facing services, despite continuing to receive an annual fall in funding, we have taken the decision to generate income streams through commercial property acquisitions.

"This avoids us having to cut services or increase council tax beyond the levels already indicated. We ensure that we have the support of expert professional advisors, undertake robust due diligence and are sighted on both the opportunities and risks."

He added: "The whole purpose of this acquisition is to generate a revenue stream that would not have otherwise been available so that it can be used to fund much valued services."