The value of the Royal Baths in Harrogate has fallen from £9.5m before the Covid pandemic to £7m today, according to a report.
Value of Harrogate's council-owned Royal Baths falls by £2.5m The value of the Royal Baths in Harrogate has fallen from £9.5m before the Covid pandemic to £7m today, according to a report. The Grade II listed building was purchased by North Yorkshire County Council in 2018 and is separated into different units including the Royal Baths Chinese Restaurant, the council-run Turkish Baths and the former Viper Rooms nightclub. But North Yorkshire Council, which took over from the county council, has struggled to generate steady income at the building as the Viper Rooms unit has been empty for more than a year and the large former Potting Shed bar for even longer. The council’s director of finance Gary Fielding blamed the drop in how much the building is worth on a “general drop in market sentiment” towards the retail and night-time sectors. The valuation is included in a North Yorkshire Council finance report that was published earlier this month. It also shows the Royal Baths building is set to generate a return of just 1.07%, far below other assets the council owns including Scarborough’s Travelodge which is forecast at 5.41% and the Victoria Shopping Centre in Harrogate at 7.64%. It’s hoped the gloomy outlook for the building could change soon with the Local Democracy Reporting Service reporting this month that an offer for the Viper Rooms unit has been accepted and an offer on the Potting Shed unit is under consideration. Meanwhile, the council will move the Tourist Information Centre from the Royal Baths to the Pump Room museum, which could raise £40,000 a year in rental income if they can find a tenant. Mr Fielding from the council said it was “simplistic” to just look at the financial value of the historic building as it is also held for the benefit of the local economy. He said:
“The Harrogate Baths property is valued at market value based upon expected sale values derived in part from existing leases and tenants. The reason for the reduction in value is due to a general drop in market sentiment towards the retail and licence sector as well as the reduction in forecast yields from the property due to the vacant units. “We continue to assess the value of commercial property as markets recover from the impact of Covid-19 and are actively engaged with interested parties to lease the units that are currently vacant. An offer has recently been accepted for one of those units and we anticipate further discussions on other units in the near future. “Commercial property is a long term investment and valuations can, therefore, rise as well as fall, over the period they are held – we would hope to see a subsequent increase in value over the coming years as more units are filled. “In order to mitigate any potential future loss funds have been set aside to ensure that there is no impact on the General Fund at the point of any future sale.”Cllr Chris Aldred (Liberal Democrat, High Harrogate & Kingsley) defended the council’s investment and said a long-term view of its performance is important. He said:
“Although, on the face of it, these figures don’t look a great investment on behalf of the council tax payer but it’s really important to take a long-term view on such investments. “The value of a commercial property can only be truly judged when it is sol, .i.e. what a buyer is prepared to pay for it. A lot of the recent business ventures within the Royal Baths have unfortunately failed, and a lot of the space there is currently empty. As the income to the council has currently lowered, the valuations referred to in the report has to be less than it was when the asset was generating more income. “However, as new lease agreements are entered into and the income increases, the commercial valuation also increases. This will mean that the paper valuation of the property should improve in the next set of figures. “The full value of this historic site for the ratepayers though is that through the ownership of the council, it can be managed in a beneficial way for a significant cultural asset in the centre of Harrogate. "This ensures it’s properly maintained and leases entered into are appropriate for the site and town’s economy as a whole.”By Thomas Barrett, Local Democracy Reporter Read more local stories from Your Harrogate here.
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