Council spends £8.1 million on Marks and Spencer and Mecca Bingo premises
Date published: 12 October 2017
Marks and Spencer, Yorkshire Street
Rochdale Borough Council has spent £8.1 million on buying the premises of Marks and Spencer (Yorkshire Street) and Mecca Bingo (Smith Street), a Freedom of Information request has revealed.
The purchase of the M&S premises cost £4.5 million, whilst Mecca Bingo cost £3.6 million.
In March this year, councillors approved up to £30m of borrowing from the government on a fixed rate loan to pay for the acquisition of properties, which are rented out to generate income for the council.
The interest on the Council borrowing is around 4.5% and the Council says it expects to attract a rental return of around 6.5%, and hence to generate almost half a million pounds of additional income a year.
The Council says ‘as well as providing income, an additional benefit of these purchases is that the council will be able to safeguard the future of these key town centre sites and ensure they complement Rochdale’s ongoing regeneration programme’.
Council Leader, Councillor Richard Farnell, said: “As spending cuts continue to take their toll on councils up and down the country, it’s important that we keep looking at all options for generating revenue to help protect vital frontline services.
“We have taken independent professional advice before buying each property to ensure maximum return on investment and are confident that the properties will prove to be a sound investment into the future.
“The council’s ownership of these buildings also means that we have some control over what happens to them in the future, so we can ensure that any use is beneficial for our residents and visitors and works hand in hand with the continued regeneration of the borough. With these acquisitions, we are investing in the long-term future of our borough.”
Mark Foxley of Town Centre Management said: "We are in very exciting times right now and partnership working with investment is key. I think it is great that the Council continues to invest in Rochdale Town Centre, and if that brings a rental income, even better."
Mecca Bingo will continue to operate on Smith Street in the same way for the foreseeable future, while M&S will keep trading from its Yorkshire Street base until the new Rochdale Riverside development opens in 2020. The new M&S store will be 50,000 square feet, more than double the current store’s trading space of 18,000 square feet.
Marks and Spencer did not respond to an invitation to comment.