Shopping centres ‘key to future of Shrewsbury'
The shopping centres bought by Shropshire Council for £52m, are facing "challenges", according to the authority, but are key to the "regeneration" of Shrewsbury.
The council has given an update on the management and performance of the Pride Hill, Darwin, and Riverside centres, which it bought in January 2018.
Writing in a report for the council's place overview committee, Gemma Davies, Assistant Director Economic Growth, said that the Darwin Centre is "performing relatively well", against a national backdrop of "continued challenging retail environments".
Ms Davies said: "Successes in recent months have included lease renewals of some of the national retail chains including H&M and Topshop/Topman. There have also been the introduction of some tenants that are really helping to drive footfall, for example a children’s play area working with Little Rascals and Shrewsbury Town in the Community."
She added that there are plans for investment next year, adding: "Investment will be made in 2020 to the mid level mall to improve the environment and provide new customer facilities."
But the authority has confirmed that the Pride Hill Centre has not fared as well, and that short-term tenants are being sought for two units after the departure of Next and Poundworld.
Ms Davies' report states: "Pride Hill is facing some challenges, increased in September with the closure of the Next store at their lease renewal date. Next have consolidated at their Meole Brace store in Shrewsbury. With Next and the former Poundworld vacant on the upper level the council team is exploring potential short term lettings and opportunities."
The council has also revealed that some lease negotiations have resulted in firms paying lower rents for premises, and that bad debt was left when two recognised stores went into administration.
The authority has also defended the purchase of the centres, with some critics previously citing a reported fall in their value as evidence of a bad investment.
Ms Davies said the fall reflected the national situation experienced across the sector.
She also explained how the ownership of the centres is key to providing the council with the control over plans for a major redevelopment of Shrewsbury – particularly the Riverside Centre.
The shopping centres were the focus of a plan for a multi-million pound redevelopment which was placed on hold in 2013, and ultimately abandoned by their former owners.
The original plan was for a redeveloped Riverside centre to be linked with the town’s other two shopping centres, with a large department store as an “anchor tenant”.
Ms Davies said: "The asset value of the shopping centres has previously been reported as having dropped from the point of acquisition. This has been experienced across investments in all parts of the country for property companies, financial institutions and councils alike due to market sentiment toward retail and this is neither Shrewsbury or Shropshire specific.
"The financial modelling anticipated that this would occur in light of the challenging circumstances for shopping environments. Town centres are facing a period of change that is substantial and probably greater than any period of change experienced in the high street previously.
"The council purchased the assets to be able to control a key part of the town centre for future sustainable development and growth, recognising retail would change, and it was therefore considered a long term investment that would take time to recover."
Ms Davies said: "Shropshire Council had the ambition and confidence to purchase the shopping centres to support the economic growth and regeneration of the town centre, to promote the development of Shrewsbury as a 'destination', helping provide an improved and attractive retail and leisure offer, and secure employment for Shropshire residents both directly and indirectly.
"The ownership of the shopping centres supports the delivery of the Shrewsbury Big Town Plan so that Shropshire Council is in a position to have control of how these developments take place rather than leaving it to market forces alone."