Medway to buy town centre shopping centre

Medway Council is set to become the latest local authority to buy a high street shopping centre in a deal worth a total of £45m.

Councillors met last week and gave the green light to plans to take over the lease of the Pentagon Centre in Chatham town centre.

As well as acquiring the Pentagon Centre, the council will also buy some other freehold properties in the town centre and has allocated £45m in its capital budget to make the purchases.

According to the council, the purchase will generate an annual income of £1m, which can be ploughed back to support council finances and services for local residents

Medway Council has recently invested £4m in the town centre, which was secured from the Government’s Local Growth Fund through the South East Local Enterprise Partnership.

The Chatham Placemaking project has helped transform the area into a thriving town centre, and the regeneration works contribute towards turning Chatham into Medway’s leading waterfront university city centre by 2035.

The acquisition of the Pentagon Centre would also help mitigate against the kinds of development in the proposed city centre that would not enhance the area, according to the council.

Several local authorities have bought shopping centres recently as a means of generating income for the council or kick-starting regeneration projects.

But some have questioned whether they are worth the financial risk, given all the issues being faced by high street retailers.

In January, North Somerset Council defended its decision to buy a shopping centre after retail giant Marks and Spencer announced its local store is earmarked for closure.

And in June last year, Bolton Council bought the Crompton Place shopping centre for £14.8m to help kickstart its town centre regeneration masterplan.

‘This presents a really exciting opportunity to bring forward more major improvements in what is expected to become Medway’s leading waterfront university city centre,’ said council leader, Cllr Alan Jarrett.

‘Chatham has a rich naval heritage, with the historic dockyard attracting millions of visitors each year, and this investment is planned to further support our existing regeneration programme for the town.

‘Chatham has benefitted from significant improvements in recent years including a new, modern waterfront bus station, enhanced public space and seating near the river walkway, and investment with Network Rail at Chatham railway station. We also have some other proposed major projects in the pipeline including new housing at sites we currently own in the town centre,’ added Cllr Jarrett.

‘We pride ourselves on being an innovative council and I believe this decision now gives us an opportunity to create a blue print for our thriving town. It will also help us to shape, invest in and improve what’s on offer in Chatham, be it for retail, leisure, business or residential. We are committed to making sustainable improvements which bring significant benefits to our residents.’

Read the NewStart Feature on whether councils gambling on their future buying shopping centres here.