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Clampdown on councils buying shopping centres

The Treasury is reported to be making it harder for local authorities to buy struggling retail properties, as concerns rise that the investments could bankrupt local councils.

The Telegraph has reported that the rate at which local authorities can borrow money for investment has been raised by one percentage point and is now at its highest level in four years. The rise is a response to concerns about unsustainable borrowing.

Councils are thought to have bought one in five shopping centres sold since 2016. Just last week Hammerson sold St Oswald’s Retail Park in Gloucester to the local council for £54m.

The increase in buying comes as many landlords seek to downsize their retail portfolios. Hammerson and Intu have both sold off key assets in recent months in an attempt to combat the impact of a wave of company voluntary arrangements.

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