Kent Surrey Sussex Issue 56
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The first phase of the Commercial

Quarter in Ashford, a development

by Quinn Estates and George

Wilson, has now opened and

provides the prime example of

public involvement in the

development.

The council underwrote the cost of

two floors in the 7,432 sq.metres

(80,000

sq.ft

.) office block. The

council’s portfolio of commercial

property also includes the Park Mall

Shopping Centre and a Wilko retail unit,

the Elwick Place cinema, a hotel and

restaurant complex, Ellingham Industrial

Estate and retail units at Stanhope.

Most recently it has bought the

former Odeon building in the lower

High Street which is the home of

Mecca Bingo.

Cllr Graham Galpin said: “The

adoption of this strategy is another

milestone in our journey towards

becoming a commercial, self sufficient

organisation. We are seeing significant

returns from our acquisitions”.

“In the 2016-17 financial year,

International House delivered a return

on investment of 12.6% and Ellingham

Industrial Estate 12.3% I am confident

this new strategy will help us to

continue delivering terrific results on

behalf of our local residents”.

SETTING AN

example

Commercial Property Register

June - October 2018

www.compropregister.com

8

Ashford is one of the local

authorities leading the charge into

expanding their commercial

property portfolio to compensate

for the loss of government funding.

To achieve this, the council has

moved to operate more like a business

which means transforming from a

traditional local authority to become

a commercial organisation. In

particular, it takes an entrepreneurial

approach in the quest for financial

self sufficiency built around a

corporate real estate strategy.

Ashford is not alone. Canterbury

is buying property and land to

regenerate the city centre to provide

cash flow to offset government cuts.

This has meant taking full control

of Whitefriars Shopping Centre

after buying out global fund

manager TH Real Estate’s 50%

holding for £75 million.

The council plans to run the

shopping centre for at least the next

decade and ownership gives it the

ability to redevelop.

Colin Carmichael, the Council

Chief Executive, commented: “The

shopping centre takes up such a

large part of the centre of the city and

ownership gives us the opportunity to

influence the regeneration of

Canterbury in the future”.

In fact, the move by local

authorities to buy shopping centres

has grown throughout the UK as

funds and other owners are willing

to sell in the face of the changes in

shopping patterns. According to BNP

Paribas, local authorities accounted

for 70% of the purchases of

shopping centres in the first quarter

of the year, spending £255.15

million on shopping centres in

January-March.

Another good example is

Shropshire County Council buying

three shopping centres for £50.75

million in the centre of Shrewsbury to

support economic growth. The logic

for councils is that they can borrow

cheaply from the Public Works Loan

Board, an arm of the Treasury.

There has been some criticism of

the councils buying shopping centres

at this stage of the property cycle.

For example, James Findlater of

Colliers International said: “Councils

have come in and will pay

yesterday’s prices for assets they are

not well placed to manage”.

Canterbury acknowledges its

need for management expertise but

points to its low borrowing costs as

providing positive cash flow from the

Whitefriars income.

The Ashford model is more

embracing and involves the council

in the early stages of development.

NEWS

Ashford

LEADS

Whitefriars Shopping Centre

A new partnership of Linton Group

and Henika has bought its first

two properties at 9-11 Wellesley

Rd, Croydon.

The partnership will focus on

commercial sites with asset management

potential in London and the south

east and the 5,574 sq.metres

(60,000

sq.ft

.) Croydon properties

present various options, such as

development potential.

Gary Linton of Linton said: “We are

expecting big things from Croydon

and fully believe in its potential as

one of London’s emerging commercial

and residential hotspots”.

The properties are at the centre of

Croydon’s £5.25 billion regeneration

programme, which seeks to change

perceptions of the area by turning it

into one of London’s cultural centres.

In particular, it is close to the £1.5

billion Westfield retail and leisure

complex by Westfield and Hammerson.

Branson

At the heart of many of the

property-related problems in the

three counties is the pressure on

resources.

Time and again we see the

familiar arguments. Too much

employment land is going for

residential property, not to mention

the conversion of office buildings for

a similar end use.

The local population in many

areas are protesting about this because their services, such as schools and

medical centres, are being stretched and their roads increasingly congested.

While it is important to build more houses, this should not be at the

expense of commercial development to achieve an expanding economy.

Also, it is arguable that too much housing is being built in the south east.

The result is that office and industrial rents are rising and in many

areas the shortage of land for industrial development is acute. On the

other hand, the growing investment by local authorities in commercial

land and buildings to counter government funding cuts may push them

in the direction of putting commercial development higher up the scale

of priorities.

What is needed is a more balanced approach. For example, building

an IKEA and 600 new houses in an area of acute traffic congestion seems

daft. Get the infrastructure right first and then build the big store.

M

ORE FOCUS ON

Croydon

9-11 Wellesley Road

Cllr Graham Galpin