Investment in Kennet Centre a 'speculative prospect'

Council says shopping centre is a' high risk' as it reviews its commercial property strategy

WEST Berkshire councillors have reiterated their view that investing in Newbury’s Kennet Shopping centre is too risky.

The council says it does not want to plough money into the struggling centre because it “does not invest in speculation”.

But it has already said that it will be reviewing its investment strategy.

The council has so far borrowed £100m of public money to invest in commercial property.

The local authority set up its investment strategy as a way of raising additional revenue in a bid to combat funding cuts from central government.

It has so far spent more than £60m on commercial property across the country.

Following calls for the council to invest in the centre, which was put up for sale in June with a price tag of £15m, the executive member for economic development, Hilary Cole (Con, Chieveley and Cold Ash), said it could “expose taxpayers to a major financial risk”.

Addressing a shortage of social housing in the district during a meeting of the council’s executive committee, Steve Masters (Green, Speen) asked what assessments the council had drawn up.

He said: “With the shortfall of housing stock, bearing in mind we have an investment pot, could we look and explore the Kennet Centre and develop a broad mix of accommodation... and that could become part of the property portfolio which is managed on the council’s behalf?

“That could solve two things.

“It’s investing and trusting in our local environment, it’s at the heart of the town so transport links are second to none, so that would be a remedy and be commercially viable.”

However, Mr Masters was told that investment in the centre was considered a “high-risk portfolio”.

Former portfolio holder for property Dominic Boeck (Con, Aldermaston) said: “One of the key points of our strategy was that we would not invest money in speculative prospects.

“This would very much be a speculative prospect.

“That’s not to say that we wouldn’t consider that later on after the strategy has been reviewed or in the context of other investments, but at the moment we do not invest in speculation.”

Mr Masters countered: “Isn’t property investment not speculation by its very definition?”

“Speculation outside of the criteria,” Mr Boeck replied.

The council has said it was at risk of not achieving its £1.5m commercial property revenue target for 2018/19, owing to “current inactivity in the investment market”.

The changing market has led the council to review its strategy.

Councillor for finance Jeff Cant (Con, Clay Hill) said: “At this point in time we are three years into a five-year project, and it’s become evident that some of the commercial opportunities that did exist seven years ago, in which we have very successfully invested and generated additional sums, are becoming less and less.

“Being prudent and aware of the fact that we are taking care of public money, we are now revisiting how we look to invest the remainder of the £100m to see how that might best be safely used.

“That’s in review, but there is a small gap that’s now beginning to arise from not having this.”