Council owned shopping centres value drops by £33.5m in two years
The value of shopping centres bought by a council has dropped by £33.5 million in just over two years, it has been revealed.
Shropshire Council bought Shrewsbury's Darwin, Pride Hill and Riverside centres for £51 million in January 2018.
The authority has now confirmed that the most recent valuation of the centres – from March this year – places them at £17.5 million, some £33.5 million less that the council paid for them.
It comes as the retail sector across the country faces its biggest challenges in decades as the impact of the pandemic, and lockdown, takes hold.
The council has said that the fall in value is "not unique to Shrewsbury", as retail has suffered across the country, and that it does not alter the primary reason for buying the centres – which was to give the council control of the major redevelopment of the sites, and Shrewsbury's town centre.
In a statement the council said it had expected the fall in retail values, and that had been a significant part in its decision, so that future plans for the town are not delayed.
Ownership of the centres means that the council has control over the redevelopment of the Riverside area of the town, which is a major focus of the 'Big Town Plan', and could have been stalled by private ownership reliant on commercial considerations.
Steve Charmley, Shropshire Council’s cabinet member for assets, economic growth and regeneration, said it is "short-sighted" to focus on the current value, and instead the authority's purchase will have long-term benefits for the whole of the county.
He said: “Having sought professional advice before and after the acquisition, Shropshire Council purchased the three shopping centres – Darwin, Pride Hill and Riverside – in January 2018 with the primary purpose of supporting the economic growth and regeneration of Shrewsbury town centre.
"This was an investment that was much-needed and will benefit not just Shrewsbury, but the whole county.
“We were aware of the possible downturn in the fortunes of the high street – an issue compounded by Covid-19 – but it’s for exactly that reason that the purchase was made – so that we could manage and mitigate any downturn, whilst enabling fresh development in the town.
"We also anticipated that the value of the centres could fall in the short-term. It’s therefore short-sighted to focus on the current value of the centres.
“The development of the shopping centres will facilitate the wider transformation of Shrewsbury as part of the Big Town Plan. Each phase of the development will have financial challenges, but the goal remains the same, to deliver a vibrant, sustainable, and commercially successful town centre.”
The council said its long-term ambitions for the centres have seen the refurbishment of the Darwin Centre middle level and customer welfare facilities, comprising new toilets and washroom facilities, including a family room, changing places facility, freshwater fountain and seating.
It said the work will be completed in early autumn.
The shopping centres fully reopened last month, after lockdown restrictions were eased.