Local authorities spent nearly £4bn on commercial property assets in recent years, a new study into the issues facing the UK’s town centres has revealed.

Carter Jonas, a national property consultancy, and Revo, a national membership organisation for retail property and placemaking, have carried out a detailed study into the challenges and issues facing high streets.

The research found councils spent around £3.8bn on commercial property assets between 2013-17, with Spelthorne Borough Council, spending £477.1m, coming out on top as the biggest local authority investor.

Nearly half of the £3.8bn was spent on the acquisition of office space. Retail, including shopping centres and retail warehouses, accounted for nearly £1.2bn of spend.

The remaining investment was split between industrial (£500m), mixed-use (£100m) and leisure (£80m) with a small amount diverted to other alternatives.

The researchers also surveyed members of the public and private sector to identify the issues most affecting high streets.

Online shopping was identified by 28.4% of respondents as the biggest challenge for town centre businesses. Business rates (13.6%) and reduced demand for space from retailers (13.6%) were also singled out.

Over half of the respondents (53.1%) said investment in the public realm was the most important initiative for delivering town centre regeneration.

Nearly half agreed strengthening local and national town centre first policies and reducing business rates were also critical.

Dr Steve Norris, head of Regeneration, Retail and Town Centre Consultancy, Carter Jonas, commented: ‘The scale of local authority investment in commercial property assets can in part be attributed to the availability of affordable credit, but is fundamentally born out of a deep desire to protect and improve the UK’s struggling town centres.

‘However, the acquisition of these assets is only the first step and they need to form part of a broader masterplan or regeneration vision to ensure the investment potential is fully realised and deliver long term social benefits.

‘The challenges facing the UK’s town centres and high streets are well documented, but we have embarked on this comprehensive study with Revo to identify a series of workable solutions that can be put into practice to halt the decline.

‘Our research reveals that over 66% of respondents still see joint ventures partnerships as the preferred funding models for regeneration projects, so we hope to ignite fresh dialogue between the public and private sector to unlock new opportunities.’

‘This joint research between Revo and Carter Jonas underlines that councils have emerged as significant owners of commercial property,’ said Ed Cooke, chief executive at Revo.

‘Owning commercial property not only generates long-term income for the local authority, it enables them to play a more active role in reshaping their urban environment to ensure they remain the heart of communities.

‘Since 2012 we have been involved in the Government’s Future High Street Forum, which has identified fragmented ownership and a lack of co-ordination amongst stakeholders as a major obstacle to reinvention.

‘We therefore welcome this positive intervention from councils but given the pace of change in the retail sector in particular, it is imperative that the public sector draws on the expertise and resource available in the private sector to manage and re-position these assets, so they remain relevant, vibrant and income-producing.

‘Indeed, the future success of the UK’s urban environments relies on better collaboration between the public and private sectors, and we will continue to play a lead role in bringing the two together.’