BOURNEMOUTH council is making contingency plans for the closure of the flagship Homebase store on the retail park it purchased last year.

The borough, which bought the Mallard Road Retail Park with £49 million borrowed from other councils, says the store in the Grade II listed former Yellow Buses depot could close “in the short term” and it plans to subdivide the unit.

Meanwhile two units remain empty at the park, which was bought to provide regular income for council services in the wake of government cuts.

However Councillor Philip Broadhead, cabinet member for economic growth, said the park remained a sound investment with businesses lining up to move in.

“We have had to make contingency plans with Homebase and have decided to split the unit,” he said. “That is due to the interest we have got for those units separately, so it is a contingency with some meat behind it. We have serious interest in that unit, potentially as a whole, certainly for two units.

“We would expect them to be filled pretty quickly but I don’t want to give too much away.”

The council has applied for planning permission for the subdivision.

Its planning statement says: “Homebase has suffered difficult trading conditions for some time, including the acquisition by Bunnings and subsequent sale to restructuring specialists Hilco.

“An initial company voluntary liquidation has resulted in the planned closure of over 40 stores.

“The store at Mallard Road was rebranded as a clearance store – with the closure of other stores nationally there may no longer be a requirement for clearance stores.”

The statement says retail property agency Morgan Williams has advised the council that “in the event of closure, the prospects of re-letting the unit as a whole are slim to non-existent”.

“The general trend for retail warehouses is for them to become smaller, and based on direct approaches to all the active retailers in the market has revealed no interest in a unit of this size. There is however potentially interest in smaller units as proposed in this application.”

While ALDI recently opened at the park, the adjoining unit has been empty since the council took over. It was joined on the market by a second unit when furniture chain JYSK closed in July.

However the council says it hopes to complete deals on both “as swiftly as possible”.

Cllr Broadhead said the rental income from the empty units was covered by agreements with the previous owners.

“The JYSK lease only actually expired in September,” Cllr Broadhead said. “The other unit was empty when we purchased the site. The council made a decision to hold off on trying to actively fill the unit until ALDI had opened, on the expectation that this would make the retail park busier and thus increase the potential interested parties.

“Since ALDI has opened, we have seen a significant increase in the footfall. I am sure that this increase in the park’s popularity has been key to us securing the interest that we have seen in the vacant units.”

The council’s decision to acquire the retail park was questioned by Christchurch councillors when the Daily Echo revealed the purchase earlier this year.

Cllr Broadhead said the site will be one of the many assets transferred to the new Bournemouth, Christchurch and Poole authority.

“We have all viewed them as a vital way to generate revenue and protect frontline services, as well as being able to shape key sectors,” he added.

“The new Bournemouth, Christchurch and Poole authority will therefore inherit a wide variety of investments which will help in the aim to achieve a balanced portfolio.”