Barnsley joins council shoppers

Barnsley Metropolitan Borough Council is the latest local government body to make a major investment into property, committing £120m to fund the Glass Works retail development in the town. The 590,000 sq ft retail element of the project, being led by development manager Queensberry, will begin in autumn next year and complete in spring 2020. A £50m first phase – a new car park, library, community space and the relocation of Barnsley Markets – has already started and £70m will be allocated to the retail build.  Councils have been investing heavily into property over the past year using cheap debt from the Public Works Loan Board to try to make up for spending cuts, making up 12% of the UK’s £3.2bn shopping centre investment market in 2016, according to Knight Frank. While some investments by councils have been outside of their jurisdictions, investing in local shopping centres has been popular as a means of promoting regeneration as well as making a profit. Barnsley Council leader Sir Stephen Houghton said: “We know that there is development risk, but we can manage it. This is a commercial proposition – the scheme will produce a profit which we can invest back into the borough. “We can get into the investment market at a much lower rate than the private investors can, and as the financing is not as expensive it makes it an attractive proposition for us. He added: “Come 2020, local authority funding arrangements will change and councils will have to start to invest to encourage economic development. “Councils will have to survive off business rates and tax and will need more income. We need to build up that business rate base, so there is a new incentive that was not there before.”    Stuart Harris, commercial director and co-founder of Queensberry, said: “There are a few schemes like this which have been promised and then never delivered, so it gives a huge amount of confidence to the operators to know that the team will fund it as they know it is actually going to happen.” Securing an anchor tenant is often perceived as the main hurdle in the shopping centre development process, but two leisure anchors have already been signed for Glass Works. Bowling company Superbowl UK has agreed a deal to open its seventh site at the centre, taking 18,000 sq ft on a 20-year lease. Cineworld has also committed to a 13-screen cinema, also on a 20-year lease. Leisure rents are in the region of £15 per sq ft. Councils that went shopping in 2016 Shopping centre Price (£m) Council The Mall Camberley, Surrey 86 Surrey Heath Borough Council Whitefriars, Canterbury, Kent 80 Canterbury City Council Merseyway, Stockport, Greater Manchester 80 Stockport Metropolitan Borough Council Manor Walks, Cramlington, Northumberland 78 Northumberland County Council   To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @AmberRoltEG or @estatesgazette