The value of the three Shrewsbury Shopping Centres bought by Shropshire Council for £51 million has plummeted to just £17.5 million in two years.
The figure – revealed today in the authority’s accounts – is the statutory March 2020 valuation, assessed before the full impact of the coronavirus pandemic had been felt on the country’s high streets.
It means the centres have lost at least two thirds of their value since they were purchased by the council in January 2018.
The latest valuation, taken in March 2019 and announced in June of that year, was £40.78 million.
But Councillor Steve Charmley, portfolio holder for assets and economic growth, has said to focus on the current valuation is “short-sighted” in view of the council’s big plans for the buildings.
The authority has continued to stand by the controversial purchases, saying the anticipated drop in value was “understood at the outset” and contributed to the decision.
This, the council says, was in order to have full control of how the centres evolved and to carry out a multi-million pound programme of improvement work at the Pride Hill and Darwin centres while bulldozing Riverside as part of the Shrewsbury Big Town Plan.
The council said the dramatic drop in value in the last 12 months was not unique to Shrewsbury and reflected a UK-wide trend.
Councillor Charmley said: “This was an investment that was much-needed and will benefit not just Shrewsbury, but the whole county.
“We were aware of the possible downturn in the fortunes of the high street – an issue compounded by Covid-19 – but it’s for exactly that reason that the purchase was made – so that we could manage and mitigate any downturn, whilst enabling fresh development in the town.
“We also anticipated that the value of the centres could fall in the short-term. It’s therefore short-sighted to focus on the current value of the centres.
“The development of the shopping centres will facilitate the wider transformation of Shrewsbury as part of the Big Town Plan. Each phase of the development will have financial challenges, but the goal remains the same, to deliver a vibrant, sustainable, and commercially successful town centre.”
The renovation of the Darwin Centre middle level began earlier this year and is set to be completed by the autumn after stalling as a result of the coronavirus pandemic. It will include new toilets and a family room, Changing Places facility, a fountain and seating.
Council Leader Peter Nutting revealed in March that plans to reconfigure the Pride Hill Centre could see a glass-roofed restaurant built on top of it, with panoramic views over the town.
Demolition work on the Riverside Centre was expected to begin by the end of this year and the council has not yet said whether this has been delayed by the pandemic.
It was also revealed in May that the centres, acquired through Jersey Property Unit Trusts in which the council bought all the shares, are still held offshore. The council is yet to announce plans for bringing ownership onshore but maintains this is the intention.