'Numbers stack up' on commercial investment strategy, says council leader
PUBLISHED: 06:55 28 February 2019
The buying up of retail premises in a declining market is not a particularly risky move, according to North Somerset Council's leader.
Cllr Nigel Ashton said his authority was right to purchase the Sovereign Shopping Centre in Weston’s High Street last year, despite being ‘fully aware of the possibility’ its anchor unit, Marks & Spencer (M&S), could close – a move which the company has now confirmed.
In the council’s 2019/20 budget, £29million has been set aside for future commercial investments.
Last year, more than £50million was spent on business acquisitions after the council was loaned £37.95million to purchase North Worle District Centre in February and a deal worth £21million to buy Weston’s shopping centre using borrowed funds was agreed in April.
Cllr Ashton, at a full council meeting on February 19, said: “We purchased two very important sites in greater Weston and the numbers stack up, we could not allow the Sovereign Shopping Centre to regenerate under private ownership.
“I think it is a very good purchase, as is the North Worle District Centre, which is a really important site by the motorway.
“I do not think there is much risk, it is absolutely the right thing to do. Shops will survive but the market has changed, Weston is an exciting place to go and visit.”
The Mercury reported last April the council predicted it would receive £1.1million a year from the Sovereign centre’s rental income.
Opposition councillors including Don Davies and Mike Bell noted car parking charges, business rents and rates as significant factors as to why retail is struggling in the town and questioned the strategy.
When asked by Cllr Bell why the council does not invest in affordable housing schemes instead, Cllr Ashton said: “Affordable housing does not stack up with generating income.”
The budget says the purpose of investments is ‘to acquire a portfolio of investments which generate a steady income and provide capital appreciation, while contributing to the alleviation of service pressures and contribute to regeneration’.
The council also wants to bid for millions from the Government’s Future High Street Fund, with hopes it will help revitalise the town centre.