Shopping centres’ value doesn’t reflect development potential, council says

The value of the Shrewsbury shopping centres will start to rise again as redevelopment plans for the buildings start to come to fruition, Shropshire Council has said.

The authority has put the sharp drop in the value of the buildings – which has plummeted from £51 million to £12.35 million in three years – down to the decline of the retail sector and a deliberate effort to empty two of the three centres as part of wider plans to regenerate the town.

But council bosses say they want to reassure taxpayers that the money is not “lost”, as there are no plans to sell them on.

Mark Barrow, executive director of place, said the valuations only considered the current use of the buildings as retail centres, and not the development opportunities the sites present.

His said this meant it was inevitable that Riverside and Pride Hill would be rendered all but worthless now almost all traders have moved out.

Councillor Dean Carroll, portfolio holder for assets, said: “This valuation isn’t a price that we would realistically achieve were we trying to sell.

“Because of the way the valuation has to be calculated, it doesn’t take into account that… the centre of Shrewsbury is one of the most A-class pieces of real estate in Shropshire. That isn’t factored into this valuation.

“We knew there was always going to be a point where two of the three shopping centres were no longer retail centres, and this would be reflected in the statutory valuation.

“This is no surprise and was always going to happen as a result of our plan to redevelop this part of Shrewsbury town centre to stop it from dying a death from lack of investment – as so many other town and city centres have done.”

Councillor Ed Potter, portfolio holder for economic growth, said he still believed the council did the right thing in purchasing the centres three years ago.

He said: “I feel it was the right decision to make, we need to show we are prepared to invest in the county town. When Shrewsbury thrives so does the rest of the county.

“It shows we are prepared to put our money where our mouth is.

“Had we not done this, what would the town look like now and what potential opportunities would there have been?”

The Riverside Centre is set to be demolished as part of wider plans to clear the whole Riverside and Smithfield Road area – a key element of the Big Town Plan – to facilitate an £800 million regeneration project to to include flats, offices, leisure uses, and open space.

Meanwhile he said the valuation of the Pride Hill Centre would increase once its planning use class has been changed from retail and the building has been repurposed.

It is hoped the lower floors will become a new ‘civic hub’ housing offices for council staff as well as other public sector partners, with the top floor to be turned into a leisure facility which could include a restaurant, cinema and bowling alley.

To enable this, traders have been moved out of Riverside and Pride Hill and offered units in the Darwin Centre, which is now at 97 per cent capacity.

Mr Barrow said the move “marks the end of three retail centres”, with the buildings now seen as “one retail asset and two development sites”.

He added that the original plan was for the Pride Hill Centre to remain in retail use for a longer period of time but the process had been “accelerated” by the Covid-19 pandemic.

Hayley Owen, the council’s growth programme manager, added that the timing of the purchase meant the centres were spared years of further decline in private ownership.

Had the council bought the buildings at a later date – which would also have been dependent on them coming back on the market – she said the regeneration plans would have been “coming from a much, much lower base”.

Ms Owen said: “The lost traders and decline of the town would have made it a much bigger uphill struggle.”

Shopping centres manager Kevin Lockwood said he was optimistic about the future of the Darwin as the town’s main retail centre.

He said: “I feel far more comfortable talking about the positives now that Shropshire Council has purchased [the centres] than I would have been about the private sector not doing anything.

“I have been here 10 years and this is the best I have ever seen the shopping centres.

“It’s great we can actually look forward to something rather than defending what would have happened if they had still been in private ownership.

“Shrewsbury is in a far better place than some other towns and cities.

“Shropshire Council took that brave decision to do what they did and it will pay off. And it’s not for the council’s benefit – it’s for the community.”