The council bought the shopping centres for £10.5m in 2023
Two shopping centres in Birkenhead town centre appear to be making £100,000 less than they were before Wirral Council bought them. The local authority bought the Pyramids and Grange shopping centres in 2023 for regeneration purposes for £10.5m.
A new report published by the local authority ahead of a Policy and Resources committee meeting on December 11 gives an update on the council’s commercial properties and how they are doing. This includes the shopping centres as well as the Europa Centre which used to include a Wilko, Birkenhead’s Vue Cinema, and the Mallory and Irvine offices.
The shopping centres were bought in 2023 to support the council’s regeneration plans for Birkenhead town centre. The Birkenhead shopping centres were built in the 1970s and feature a number of brands including Next, River Island, Costa, Burger King, Card Factory, Claire’s and EE.
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While many of the details of how the shopping centre is doing has been kept confidential, the report said the purchase was “not solely an income generating endeavour” and in its management of the centres, “the council is seeking to provide security and longevity to its tenants, create the right mix and location and where necessary consolidate the centre.”
The report said the centres had a net income of £1,050,460. No dates were given for this figure but a property portfolio document, seen by the LDRS, published when the shopping centres were up for sale in April 2023 said they “benefit from a gross income of £3,355,456 per annum and a net income of £1,155,490 per annum.” Wirral Council was approached for comment but did not respond by the time of publication.
A recent regeneration committee report said commercial income had seen a dip of £300,000, £100,000 more than expected, adding: “Ongoing discussions with both current and potential tenants across ourcommercial estate continues.
“The delivery of regeneration schemes may bring temporary disruption for some tenants that will impact on this too. As rental agreements renew, there is also potential for renegotiated tenancies that will impact this position further.”
The 2023 portfolio document said two of the tenants were due to have leases expire in 2024 representing over £236,000 of income for the local authority. Three leases were due to expire in 2023.
A report written by consultancy firm Pragma for the council previously made a number of recommendations for sweeping changes to the shopping centres in order to drive more people into the town centre. This included bringing more brands, building up a night time offering, and potential large scale developments like leisure and health centres to encourage footfall.
The Pragma report said the look of the centres were “inherently dated” with its look putting off potential brands “from trading by an environment that fails to reflect the look they aim to create and portray.” The report said renovations were needed to avoid major brands leaving the shopping centres and “reletting their units would be extremely difficult.”
The local authority has previously said the Pragma report is now out of date and newer plans have been developed. These plans include the council’s vision for the area around St Werbugh’s which could see new homes, dining, and retail buildings in the east of the town centre with much of the current Pyramids demolished.
The aim of that plan is to “make Birkenhead a destination in its own right, reinstating it as the capital of the Wirral, and a unique place to live, work, shop and enjoy leisure time.” However any developments are expected to be reliant on future bids for government or Liverpool City Region Combined Authority grants.
The December 11 report also provided an update on the Europa Centre and the Vue in Birkenhead. When the council bought Europa in 2018, it had four tenants but since then, it has lost two including Wilko.
The idea when the Europa Centre bought was for the building to be re-purposed with the latest report showing it has an income of £243,000. The local authority borrowed £8.4m to buy the Europa Centre arguing it would save money as it would “benefit from a revenue stream which exceeds the borrowing costs.”
However Wirral Council did not reveal what the current costs are to maintain the building or the latest borrowing costs though a February report said the Europa Centre had lost £4.27m in value. Costs to repay borrowing comes from day to day council services budgets.
The Vue is due to have its lease at the Europa Boulevard building expire in five years which industry news publication Place North West reported as £21 per square foot. The council bought it for £7.1m in 2019 but a report earlier this year said it had lost £1.7m in value.