Following Cllr Costigan’s letter in this paper and the subsequent response from Brian Evans, I have also investigated the East Hampshire District Council website for details of the commercial property held and its current value.
The valuation taken in 2021 shows this to be £128million but we know commercial property values have fallen significantly since then.
The question is by how much, and this is where a Commercial Property Index can provide some indication.
In March 2021, the Green Street Property Index stood at 123.7, but two years later in March 2023 it had dropped to 106.8 – a 13 per cent drop.
This implies the value of the EHDC property could well have fallen by more than £20 million to around £107 million – a serious loss in anybody’s language.
To be fair, the drop in value is not critical if the council has no intention of disposing of property. It is the continuing rental income that is more important.
The trouble is the fall in expected value is related to anticipated future rental income and there is a widespread feeling that any new leases will only be signed at a considerably lower rental.
I suspect the council may have recently had a strong indication of just how serious the situation is by the way Waterstones left their original premises in Rams Walk only to subsequently sign a lease for new premises on the opposite side.
I suggest that using this information and by consulting with their surveyors, EHDC should be planning now to prepare and publicise a comprehensive report on the financial implications that are likely to follow from the next valuation in March 2024.
It will almost certainly be bad news, particularly if the interest rates charged have risen.
Every man, woman and child in East Hampshire has more than £1,000 involved in these investments. They have every right to expect their investment is carefully controlled and not, as many suspect, to be far too dependent on the vagaries of the property market.
By Rodney Clark
Bell Hill Ridge, Petersfield