Cheltenham Borough Council is proposing to sell its interests in Regent Arcade shopping centre.

The council owns both freehold and long leasehold (with around 163 years still to run) interests in Regent Arcade, which in turn are let to Canada Life under a long lease at a ground rent equal to 15.24% of net rental income, subject to a minimum base rent of £575k per annum.

For at least 10 years, Cheltenham's biggest shopping centre has been delivering a net income to the council equivalent to the base rent of £575k.

A proposal is going to next week's cabinet meeting (September 19) for the council to sell its principal interests in the centre and allow the market to invest in its future.

Selling off the arcade would free up funds for the council to invest in new projects, which will deliver financial returns and secure economic, environmental and social outcomes.

The disposal will provide cash which can be used for investment in any of the key projects outlined in the council's Corporate Plan or to reduce borrowing at a time when interest rates are the highest in 15 years.

While Regent Arcade currently provides a positive net contribution to council funds, there are options for re-investment which will generate a higher returnl.

The council has held its various interests in the shopping centre since it was first developed, around 1983.

It has maintained its interest in Regent Arcade for 40 years to exercise some control as landowner of an important town centre site, but also to deliver an income linked to its financial performance.

With changes in town centres and the way people shop, and limited short-term potential for rental growth, the council has substantial capital value tied up in the centre, which could be deployed in new investment opportunities that have the potential to deliver both increased revenue and capital returns.

The proposal is to delegate authority to dispose of the freehold and head leasehold interests in Regent Arcade Shopping Centre to Paul Jones, executive director for finance, assets and regeneration, in consultation with Cllr Peter Jeffries, deputy leader and cabinet member for finance and assets.

If the proposals are approved, the council will work with an experienced commercial investment property agent to help develop and deliver the disposal strategy for the arcade.

The 185,000 sq ft arcade was constructed between 1982 and 1984 and officially opened by Princess Anne in 1985. Its iconic Wishing Fish Clock, designed by Kit Williams at a cost of £80,000, was unveiled in 1987.