Liverpool City Council is to buy Liverpool Central Shopping Centre to help accelerate a series of multi-million pound regeneration schemes.
The council will be purchasing the lease from Aviva Life & Pensions UK Ltd as part of a programme to stimulate the wider redevelopment of the nearby Knowledge Quarter Gateway zone which includes the Circus Liverpool development and from Lime Street to Bold Street.
A report to the city council’s cabinet on Friday (25 May) is recommending the acquisition of the centre’s 114 year lease and for the council to simultaneously enter into a 20 year underlease with Liverpool CSC Ltd.
The proposed tenant company is related to the Augur Group, which has taken over the previously stalled redevelopment of the Lewis’s building and surrounding plots, and they will also have an option to purchase the shopping centre from the council after five years.
The underlease for the centre, which contains 21 retail units covering more than 50,000 sq ft, will earn the council £4.3m over the first five years – meaning it will make a profit over the loan repayments to facilitate the purchase.
Buying the shopping centre is also part of the council’s Invest to Earn strategy, which uses the council’s ability to borrow at low rates to stimulate profit that is then reinvested in services, and follows similar deals such as the purchase of the Cunard Building which now generates a rental income of £2m a year.
This strategy has been developed to protect the most essential services in the face of a £444m cut to the council’s budget by 2020 since 2010.
The shopping centre boasts huge footfall as it doubles as the main entrance to Liverpool Central Station – one of the busiest rail stations in the UK with passenger numbers reaching 16 million per year.
Liverpool City Council are currently assessing tenders to develop a masterplan for the Knowledge Quarter Gateway zone, which would encompass the council’s multi-million pound plans to redevelop Lime Street and Bold Street and connect it’s £1bn Paddington Village scheme to the main retail core of the city centre.
Mayor of Liverpool Joe Anderson said: “The purchase of Central Shopping centre is too good an opportunity to pass up. It enables us to acquire a strategic site in a prime city centre location which we have plans to regenerate and the investment makes a profit for the council to reinvest in our services.
“The beauty of this deal also means that plans for Lime Street, Lewis’s Building, Circus Liverpool and Central Shopping Centre are now all inter-connected. This will all help to underpin the development of the Knowledge Quarter Gateway which is the next major piece in a 10 year plan to regenerate the city centre and finally connect the waterfront to our universities.”