Ashford warned COVID-19 could put pressure on property portfolio
Ashford Borough Council’s property portfolio could face ‘significant’ pressures because of the continued COVID-19 pandemic and lockdown measures, according to a new report.
The report, which went before cabinet last week warned that the retail sector has already been under significant pressure in the run up to the pandemic, as more people buy good online.
‘With the enforced closure of most retail and leisure establishments for at least three months the impact on the retail and leisure sectors has been immense even with significant levels of support provided by the government,’ the report notes.
‘The list of chains to have gone into administration is extensive and includes the likes of Monsoon, Oasis, Oak Furniture Land, Go Outdoors, Harveys, DW Sports and Debenhams.
‘Whilst many of these were already struggling prior to the pandemic the forced closures were the final straw for many of these chains,’ it adds.
The report adds that whilst none of the above chains are tenants of the council, the council has not been immune to the impact of the pandemic.
Both Travelodge and Poundstretcher, which are council tenants at Elwick Place and Park Mall respectively have entered into Company Voluntary Arrangements.
The report also warns that the’ most concerning impact that the council may face in the future is in the changing use of office accommodation’ with more people working from home.
‘This successful transition has already led many businesses to review or to start to review their working practises, especially in relation to home working,’ the report states.
‘The impact on office rental values has already started to be seen in major working hubs such as London although this has partially been caused by the concern of company staff having to travel on public transport.’
And according to the report, the property portfolio generated a surplus in the 2019/20 financial year £2.41m on a total income of £5m.
It adds the surplus is around £550,000 higher than the previous year thanks to an increase in income from more recently acquired assets and reduced liabilities in older assets.
‘We have to accept that because of COVID, the council will face rental income reductions, however officers are working hard to reduce the potential impact on the authority’s finances,’ said Ashford’s portfolio holder for corporate property and projects, Cllr Paul Clokie.
Photo Credit – Free-Photos (Pixabay)
