Worthing Borough Council’s commercial property income fell by £260,000 last year as the authority faced shorter leases and difficulties with some tenants.
The council’s property portfolio made £2.62million in net income in 2025-26, down from £2.88million in the previous year.
The money helps to fund council services, with challenges such as short-term leases at Montague Street and ongoing negotiations with tenants causing the decrease, according to a report.
The average time left on Worthing’s commercial leases is 3.65 years, compared to 6.63 in Adur, with the council having an informal target of more than five years.
The report says early signs that tenants could be struggling financially are now being monitored and any unpaid rent is being watched closely. The council is also investing money to improve properties and make them more suitable for tenants.
Shops in Montague Street are currently the only properties in the council’s portfolio being prepared for sale and form part of the wider Grafton Centre car park redevelopment.
Worthing and Adur’s commercial property holdings were built up between 2017 and 2022 with the councils purchasing 18 properties for a combined £183million.
The Strategic Property Investment Fund report was discussed by the councils’ joint audit and governance committee on September 22.
Councillors questioned why no new properties had been purchased since November, 2022. Officers said that higher borrowing costs, restrictions on where councils can invest and a lack of suitable properties had made it difficult to find those that fit its criteria.
Councillors also questioned the portfolio’s reliance on offices, which make up 68 per cent of Worthing’s commercial property income.
Councillor Richard Nowak asked if the council would invest the same amount if it were starting again with £125million today, given changes in the office market and a rise in working from home.
The council’s property and investment manager, Mark Hopper, said the ‘optimum mix of properties’ would depend on what the council wanted to achieve and how the market was performing.
He added that the current priority was to secure ‘as much income as possible, for as long as possible’ to pay for council services.
The report stated there was no expectation that either council would buy new investment property for the time being, as preparations continue for Local Government Reorganisation.