Woking Borough Council last week paid £8M to the Lancashire Pension Fund for Globe House – an office with a ground floor shop in Bandstand Square in the town centre.
The purchase underlines the council’s commitment to owning and operating the town centre and comes nearly three years after it outbid private sector companies and paid IM Properties £65M for Wolsey Place shopping centre.
That figure is dwarfed by the £150M the council plans to spend as it turns developer and builds 200,000 sq ft of shops, tower blocks of up to 300 flats for rent and a 180-bedroom hotel.
It has already found an anchor for the new retail development in September. Marks & Spencer has agreed to take a 60,000 sq ft store.
The council’s chief executive, Ray Morgan, explains “we are going to borrow from the National Loans Board and then make a loan to Bandstand Square, the commercial company that will build the development”.
The council and Surrey County Council each own 24% of Bandstand Square. The other is 52% owned by Moyallen, founded by Peter Robinson, the Craigavon-based frozen food magnate. Moyallen paid British Land £116M for the head lease on Woking shopping centre the Peacocks in 2008.
Morgan says that British Land was not interested in a joint venture while it owned the Peacocks. The borough council, which owns the freehold of the Peacocks, stepped in as a new investor and lent Moyallen £5M. It secured the loan on the head lease. This allowed Moyallen to extend the peacocks into the town square – a development that was completed in July.
Moyallen pays rent of £800,000 a year and manages both shopping centres.
On 22nd November the borough council will vote to relocate Bandstand Square’s open air market into roofed in accommodation between Wolsey Place and the Peacocks.
The plan is to develop up to 17 storeys above the new shops. Morgan describes the flats as “mid-market homes” that will be part of the private rented sector, possibly operated by the council’s own company, Woking Borough Homes. One of the potential residential partners is Barratt Homes.
The plans will be made public in March. The aim is to begin work on site in April 2014 and complete it in 2017. The new shops should boost the town’s shopping space to 1M sq ft.
SOURCE : PROPERTY WEEK 9TH NOVEMBER 2012