The 'gamble' of councils buying shopping centres

A council which spent £121.6m on a shopping centre has said: "things are really positive" for the site, despite empty units and a leaking roof.

Cherwell District Council bought Castle Quay in 2017 to ensure a canalside redevelopment, featuring a cinema and restaurants, would go ahead.

Meanwhile, West Oxfordshire District Council said the 2023 purchase of Marriots Walk shopping centre in Witney has been a "great success" and "makes quite a bit of money" which "helps to subsidise other services".

Professor Tony Travers, an expert in local government at the London School of Economics, said buying shopping centres is a "gamble" for local councils, but it can be a good use of public money.

Prof Travers said councils might want to buy shopping centres for "perfectly rational reasons": to improve an area and create a civic centre, or to create an "income stream that... can be then used to pay for services".

But he warned: "councils are not property companies... I think the challenge for any one local council is how to have a degree of expertise that allows them to make rational investments and not end up with an asset that they end up not being able to produce a revenue stream from".

It was a former Conservative administration at Cherwell District Council which bought Castle Quay in 2017: shortly before its flagship store Debenhams went into administration.

Since then the centre's lost Marks & Spencer, H&M and has many empty units - and last year the council announced it needed to spend £1.6m to fix the roof.

But lead councillor for finance and regeneration at Cherwell District Council, Lesley McLean said "things are really positive for Castle Quay right now".

The council moved it's offices into the centre in 2025 and announced the town's library will take-up residence in the former M&S unit.

"Castle Quay is a real asset and a real benefit to the Banbury community... it's a real focus for regeneration for us and has real possibilities for the future" she said.

Asked if Castle Quay was making money for the council, McLean said: "that's a really difficult thing to judge because... the debt that was incurred in relation to [its purchase] isn't separate within our accounts. But what I can say is that we are making the most of the assets that we hold".

West Oxfordshire District Council bought Witney's Marriots Walk shopping centre in 2023 and said it expects every unit to be occupied shortly, for the first time since it opened in 2009.

Deputy leader Duncan Enright said: "We've really got a stake in this. We love our towns, we love our villages and we want to see them thrive. So we're going to put our heart and soul into this in a way that a distant investor... is not going to do, with the best will in the world".

"We're doing really well and it's a great place to come and the shops support the markets and the markets support the shops. It feels like we're into a good time at the moment".

Prof Travers said: "In making such an investment a council has to be very, very careful that it actually knows what it's doing and it produces a good result for local people and for council tax payers into the medium and long term".

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