left to right: Councillors Damian White, Viddy Persaud and Robert Benham (credit: Havering Council)
Reaction to the news has been predominantly negative, with many questioning where the money has come from and why it is not being spent on services for the borough’s residents.
It is so easy to just blindly criticise the council, but there are many long-term benefits which some people have failed to take into consideration.
Let’s start off with the money involved: the property was listed for sale with offers “in excess of £13,250,000” being welcomed by Colliers International, the real estate company responsible for selling the unit.
The amount Havering Council actually paid has not been disclosed, but this purchase is a shrewd, long-term investment and many people are overlooking the fact that it promises a large income to the council for the next eight-and-a-half years.
(credit: Colliers International)
M&S has a lease to use the unit until March 2027, and currently pays £833,171 per annum in rent. That figure is set to rise to £849,418 per annum from September 2019.
Between now and the end of the lease, that means the rental income will stand at more than £7 million.
That money will be available for Havering Council to provide services for the borough’s residents, services which have been depleted by cuts from central government.
And when M&S’s lease is up, it has the opportunity to sign another 40-year deal.
But if it doesn’t, the council has the options of finding another tenant, selling it, or finding another use for the unit.
That does include the potential for turning it into homes, with Colliers International describing the property as “a long-term residential development opportunity”.
Although Havering Council leader Damian White has stressed his commitment “to sustainable retail and local business in the borough.”
It is impossible to predict what state the high street will be in by 2027 but Havering Council has moved to secure a property that provides it with a guaranteed source of income until March 2027.
What happens beyond that will not be clear for some time; we may find out more when the council unveils its Romford Masterplan in December.
But whatever does happen, Havering Council has guaranteed income for more than eight years and a property that will be worth a considerable amount of money at the end of that.
