Cinema is one of four assets set to be sold
Council to do away with multi-million pound investments
Slough Borough Council agreed to dispose of four out-of-town assets this week, including a cinema in Basingstoke and a hardware store in the Midlands.
The authority originally bought the properties to ‘bring in investment’ to the council, lead member for finance Councillor Rob Anderson (Lab, Britwell and Northborough) told a cabinet meeting this week.
But councillors learned that some aren’t performing as planned as cabinet members backed proposals to dispose of them.
They comprise of an Odeon in Basingstoke, Hampshire; a Wickes store in Wolverhampton, West Midlands; a garage in Bradford, West Yorkshire and a Waitrose supermarket in Gosport, Hampshire.
SBC has received criticism for its purchase of the assets amid its subsequent bankruptcy and the move was also questioned by Government-appointed commissioners brought in to keep an eye on the council’s finances.
They added that the disposals are the best option for the authority in the market as it looks to dig itself out of mass debt.
“It is hard to see why the council could have decided that these investments were a good and appropriate use of public money,” commissioners said.
“The disposals are essential to meet the financial recovery goals and are best value in the market today. The recommendations are strongly supported.”
The four assets were acquired for £31.8million in the period 20172019, but the value of two of them has dropped by more than £5million, the meeting heard this week.
“Asset values change over time for a variety of reasons, including market conditions,” SBC said in its cabinet report.
“Two of the assets have largely maintained their values but the Odeon and Waitrose have fallen in value by £5.3million in total.”
Opposition councillor Wayne Strutton (Con, Haymill and Lynch Hill) said: “Let’s just be clear – various questions were asked on two of these properties when they were bought [and] assurances were given at the time about how good an investment they were.”
SBC is looking to dispose of a number of assets to raise money for its depleted coffers, and council leader Cllr James Swindlehurst said this was ‘one small slice of what is coming’.
He added that although the value drop ‘makes you wince a little’, it was best to dispose while the assets still have tenants and remain ‘valuable’.
“Otherwise we will be trying to sell a box in nine or ten months’ time, and it will have no value,”Clr Swindlehurst said.
“This is a very small slice of what will be a several hundred million pound disposals programme. We will see some significant returns which will more than offset these losses on the assets.”
Cllr Anderson added that he had been looking to get the assets off the books since he started his new position as finance lead.
All four sites have now been marketed by SBC’s advisers
Avison Young to ensure a buyer is found for the leasehold.
Senior councillors also heard that the cinema and supermarket values have plummeted due to falling markets.
SBC hopes to save £644,000 by disposing of the assets due to a subsequent reduction in borrowing costs.