Council Agrees to Wind Up Loss-Making Property Company

Harborough District Council has agreed to close a loss-making property company and sell off its assets after recording losses of more than £800,000 over the past two years.

Councillors approved the move at a Cabinet meeting last night acting as shareholders of Harborough District Commercial Services Ltd (HDCS Ltd), which owns retail units occupied by Sports Direct and Tesco in Market Harborough town centre, along with five flats.

The company was formed in 2019 to manage and operate property assets, however the council says changing high street conditions, including the rise of online shopping and the impact of the Covid-19 pandemic, have affected property values and commercial returns.

Premises occupied by Sports Direct and Tesco are to be put up for sale

While lease extensions were secured with Tesco and a new letting agreed for the Commons retail unit with Sports Direct, the council says these arrangements are less commercially advantageous than previous deals, and the flats now require investment that would be better managed by a new owner.

As a result, shareholders – members of the ruling Conservative administration – have agreed the assets should be marketed for sale via an agent, with the company to be wound up as soon as practicable once the properties are sold. Any remaining assets will then be transferred back to the council.

The Local Government Association said the company’s potential had not been fully realised, while external auditors raised concerns after accounts were submitted late for a second consecutive year.

The former coalition administration had previously described the company, which was established before it took control of the authority, as a “complete white elephant”.

Leader of the opposition, Cllr Phil Knowles has called the decision to close the firm “the least worst option” :

Cllr Phil King, Deputy Leader of the council, has responded: