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Council earns PS2.7m from shopping sites; Income is more than investment in banks would have made, council bosses say.

Byline: ALEX MOORE Local Democracy Reporter

Council-owned shopping centres made more income last year than bank or building society investments would have done, councillors have been told.

New and renewed tenants will also help "ride out" last year's drop in their value, Shropshire Council heard.

The authority's head of economic growth, Gemma Davies, said Shrewsbury's Darwin Centre saw a five per cent drop in visitors in December, compared to 6.7 per cent nationally, and will see a Skechers open soon.

Pride Hill Centre's footfall dropped by 12.7 per cent, and Ms Davies said the closure of Next "had an impact on that". She also told the place overview committee that the Riverside Centre could be converted into homes. Purchased by Shropshire Council for PS53 million in 2018, the centres were re-valued at PS11.5m less the following year. But finance chief James Walton said they had made PS2.7m - while investing the same amount in financial institutions would have made around PS500,000. Refurbishment to the Darwin Centre will begin in April and last until the summer, Ms Davies told the committee.

"This is to bring the mid-level mall up to modern standards," she said.

Several existing stores had renewed their leases, she added, but the Disney Store is due to close on Saturday.

Finance chief James Walton said the council has generated PS2.7m of income.

"That's more than five per cent of the initial investment of PS53m," he said.

"The shopping centres were bought for an economic regeneration purpose, and using cash in the council's account that would have otherwise been invested in banks and building societies and would otherwise have made a return of 0.8 or 0.9 per cent. However, we have to take into account the fact the value of the shopping centres has fallen."

"Providing we don't decide to sell them, we can ride that out."

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Author:ALEX MOORE Local Democracy Reporter
Publication:Shropshire Star (Shropshire, England)
Date:Jan 20, 2020
Words:315
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