Councils urged to become yet more active in investment
With research showing local authorities investing £3.8bn in commercial property between 2013 and 2017, Carter Jonas and retail membership body Revo have called for councils to pursue more joint ventures to turn around their town centres.
Research completed by Carter Jonas and Revo shows a combined outlay by councils of £3.8bn on commercial property assets between 2013 and 2017. Warrington Council’s 2017 acquisition of Birchwood Park helped make it the second biggest spender at £219.5m, with Spelthorne in Surrey way out in front with £477.1m spent within its boundaries.
Of the £3.8bn, nearly half was spent on the acquisition of office space. Retail accounted for nearly £1.2bn of spend with £600m invested in shopping centres and £400m on retail warehouses. Of the remaining investments, £500m was spent on industrial property, £100m on mixed-use property and £80m on leisure.
The research is to form part of a study, released in autumn this year, that will also survey local authorities, developers, investors and memers of the public as to the challenges facing town centres.
According to research so far, when asked for the most important initiatives in delivering town centre regeneration, 53.1% of respondents highlighted improvements to and investment in public realm as the single most important factor. Almost half of respondents agreed that strengthening local and national ‘town centre first’ policies and reducing business rates were also critical.
Revo chief executive Ed Cooke said: “This joint research underlines that councils have emerged as significant owners of commercial property.
“Owning commercial property not only generates long-term income for the local authority, it enables them to play a more active role in reshaping their urban environment to ensure they remain the heart of communities.”
Cooke said that Revo has since 2012 been involved with the Government’s Future High Street forum, which has identified fragmented ownership and a lack of co-ordination amongst stakeholders as a major obstacle to reinvention.
He continued: “We welcome this positive intervention from councils but given the pace of change in the retail sector in particular, it is imperative that the public sector draws on the expertise and resource available in the private sector to manage and re-position these assets, so they remain relevant, vibrant and income-producing.”
The increase in public sector property investment has been covered regularly by Place North West in recent months, with retail being a particular focus. In March, Wigan Council bought the 440,000 sq ft Galleries shopping centre, saying it had suffered “years of stagnation and decline,” following councils including Rochdale, Stockport and Chorley in directly investing in retail.
Trafford purchased The Graftons in February, while Cheshire West & Chester has this year taken control of Winsford Cross shopping centre and progressed plans art Weaver Square, Northwich, which it bought in 2014.
More generally, Trafford last year approved a CBRE-authored strategy on building its investment portfolio.
Dr Steve Norris, head of regeneration, retail and town centre consultancy at Carter Jonas, said: “The scale of local authority investment in commercial property assets can in part be attributed to the availability of affordable credit, but is fundamentally born out of a deep desire to protect and improve the UK’s struggling town centres.
“However, the acquisition of these assets is only the first step and they need to form part of a broader masterplan or regeneration vision to ensure the investment potential is fully realised and deliver long term social benefits.
“The challenges facing the UK’s town centres and high streets are well documented, but we have embarked on this comprehensive study with Revo to identify a series of workable solutions. Our research reveals that over 66% of respondents still see joint venture partnerships as the preferred funding models for regeneration projects, so we hope to ignite fresh dialogue between the public and private sector to unlock new opportunities.”