The council purchased Shrewsbury's Darwin Shopping Centre, the Pride Hill Shopping Centre and the lease on the Riverside Shopping Centre along with the Riverside Medical Practice last year. They have since dropped in value by £11.5 million.
Councillor David Vasmer challenged authority leader Peter Nutting at a full council meeting at Shirehall, after Councillor Nutting spoke about the financial outturn for 2018/19. Councillor Vasmer suggested the purchase was a waste of funds, and pointed to figures saying rental intakes have taken a major hit.
He said: “We’re about £500,000 down on rental intake, and we clearly have an issue which has seen the shopping centres lose 20 per cent of their value.”
Councillor Nutting argued: “You’ve got to learn to take the long-term view with investments. We knew when we bought it things would get worse before they got better. That will continue for another year or two.
"As a purely financial transaction, we are making more money from the shopping centres than we were when they belonged to the banks. Forget all the other reasons; we bought it to do with turning the town centre around. We are getting far more income from them than before when we didn’t own them.”
Councillor Nutting had previously said that the loss in value was not a big concern, and the centres were bought to support the future of the town.
The £11.5 million revaluation loss formed part of the £20.4 million increase in expenditure between 2017-18 and 2018-19, partly balanced out by a £7,254,000 increase in income.
In total, Shropshire Council ended 2018-19 with a £167,000 underspend on a gross budget of just over £562m.
Earlier this year, Councillor Nutting said cinema screens, restaurants and a gym could see one of Shrewsbury’s shopping centres transformed into a new leisure zone.
He said one idea was to keep the Darwin Centre as a main retail unit, while the Pride Hill centre could be turned into a centre where people could spend a whole night out, boosting the town’s economy.