Council bosses could try to buy Eldon Square, it has emerged.
The city centre shopping mall’s future has been thrown into doubt over the past few years, with its value plummeting and key tenants including Debenhams shutting down as the Covid pandemic wreaked devastation on the retail industry. There has been talk of converting parts of the shopping centre into flats or that empty units could be repurposed to host cultural exhibitions and other activities.
But the prospect of Newcastle City Council taking control over the site has now been mooted. The local authority already has a 40% stake in Eldon Square, the value of which plummeted from £145m to just £93m in 2020.
Read More: Parts of Eldon Square could be turned into housing – but empty Debenhams unlikely to become flats
Asked on Thursday if the shopping centre’s falling stock offered the council an “opportunity to cement our long term investment”, a civic centre boss hinted that the local authority might seek to purchase it. Michelle Percy, the council’s director of place, told members of an audit committee: “It does, of course, open up opportunities. But we will take a political steer on the organisation’s view of that, the longer-term positioning and how that impacts on the city centre and on residents as well.
“It does give us an opportunity and understanding where those values lie right now is important. But again, the risk is that the decision we take now has to in some way be future proofed for the next 15 or 20 years.
“It may well be that our authority may want to consider moving into that space, but we also have to think about what our exit might look like if we wanted to do that. So we are tabling that with the cabinet.”
Eldon Square’s former majority owner Intu, which also ran the Metrocentre, collapsed in 2020. Its 60% stake is now held by Intu Debenture Plc, which appointed APAM to manage the shopping centre. As well as Debenhams, the pandemic also resulted in brands like Topshop, Dorothy Perkins, Burton, and Thornton’s disappearing from Eldon Square.
A report from APAM in January 2021 listed the potential sale price of Eldon Square at between £103m and £171m. Ms Percy admitted on Thursday that the majority shareholder’s vision for the shopping centre “does not quite align with our own”.
She said: “We have a fairly good relationship with the bond holders, but these are debenture holders who have a short and medium term plan that does not quite align with our own. Our own by the very nature of it is long term and strategic, about what is right for that shopping mall and for the city.
“In saying that, we meet with them regularly and talk with them about what their exit strategy might be. They talk about a two to seven year programme, but they may well want to exit within that period. Our position is that we want a much longer term view.”
Speaking after the meeting, she added that Eldon Square is “an important part of the fabric of Newcastle city centre from which the council derives an income” and that the decision on whether or not to purchase a controlling stake would be for the authority’s political leadership.
Read More:
- 'I gave blood for the first time - it was so easy I can't believe I haven't done it before'
- Gateshead Quayside arena in need of £20m Levelling Up boost as construction costs escalate
- Gosforth school to become second in Newcastle to ban cars outside its gates this summer
- Another top boss to leave Newcastle City Council as transport chief heads for government job
- £3bn devolution deal for North East mayor and 17,000 new jobs is 'in national interest'
