Shopping centres ‘still vital for Shrewsbury’s long-term future’
The pandemic has increased costs and reduced income from Shrewsbury's Shropshire Council-owned shopping centres – although the authority says they remain vital to the long-term success of the town centre.
A report outlining the latest performance of the Darwin and Pride Hill centres, bought by the council for £51 million in 2018, outlines some of the difficulties faced as a result of the pandemic.
Mark Barrow, the council's executive director of place, says that the centres are key to a long-term aim of ensuring a "vibrant, sustainable and commercially successful town centre".
However, he reveals that major companies have re-negotiated reduced rents and concessions at the centres, while some have not renewed leases "resulting in empty units that increase the council’s void service charges, rates and insurance liabilities".
Mr Barrow also says there is a concern that there will be further costs faced by the authority with more stores potentially going out of business.
He said: "Several stores have entered administration resulting in an increase in bad debts for which there is currently a Government moratorium on pursuing non-payment of rent during the Covid crisis.
"This is making the collection of rent and service charge extremely challenging. It is probable several retailers, who are continuing to trade now whilst there can be no debt recovery action, will cease trading and enter administration when pursued in due course for the outstanding arrears."
Mr Barrow said that the town is performing well against the national picture but said the pandemic and February's flooding meant Shrewsbury "has suffered significantly".
He said: "This year has and continues to be a significantly challenging and unprecedented, in terms of impact nationally to all retailers and town centres.
"The high street was already going through changes in shopping patterns, behaviours and function, however this has severely detrimentally impacted on retailers, along with the flooding in February, Shrewsbury has suffered significantly."
The council has faced criticism over the purchase of the centres, which saw their valuation slashed to just £17.5 million earlier this year, but Mr Barrow says the move is vital for the future prosperity of the town.
He said: "Without the council ownership, it would be left to the market to determine the future of significant areas of retail space in the town. The council had the confidence and vision to purchase the shopping centres and continues to work to ensure it supports the aspirations of the Big Town Plan and support the town to grow and flourish."
The council ownership is tied to plans to entirely redevelop the Riverside area, demolishing the Riverside shopping centre, multi-storey carpark, former medical practice and other buildings.
The plans for the site are being drawn up but are likely to be based on a redevelopment that includes residential buildings, offices, leisure, retail, education, culture, and arts uses, as well as potentially a hotel.
The plans also include converting the Pride Hill centre into use for offices, civic functions, cultural and leisure activities – possibly a cinema.
The report will be discussed at the council Place Committee on Thursday.
