As the UK economy shows signs of recovery, landlords are making plans to bring new shopping centre space on stream - and all of these developments have fashion at their hearts.
It wasn’t long ago that no news from the property industry was good news. The global recession in 2008 called a halt to the development pipeline and almost overnight the outlook was bleak.
Fast-forward to today and, while we aren’t back to full confidence, the outlook has certainly changed. Plans are back on the table and, in a few selected locations, ground has been broken. A mini-wave of projects is rising and, while it’s still early days, fashion retailers should be looking closely for their next opportunities.
Take Oxford for example. A city with a grand old name in a wealthy part of the country attracting plenty of visitors each year, it is underserved in terms of quality retail space. For years it has been ripe for development, the type that fashion businesses are craving, and now, finally, it is happening.
As CBRE head of shopping centre leasing Mark Disney explains, this appetite among fashion retailers has helped drive the next phase of development and will play a part in shaping it.
“It’s the clarity of the retailers’ strategies that is reassuring the developers that new projects might be viable and in demand.
Everybody has woken up to the importance of delivering added value through the experience in the new centres,” he says.
“Landlords are keen to challenge themselves to offer something you can’t get online.”
Which is exactly what fashion retailers want to hear. In today’s multichannel business, the role of the store is fundamentally changing and, if retailers are going to stay ahead, they need their landlords to follow suit.
Aurora Fashions group property director Ian Dudley says: “Fashion brands want to make statements and be more experiential now. There is a move to bigger formats to showcase all of the range to mirror the stock available online, particularly in the metropolitan and regional centres.”
And with more fashion retailers refocusing their property portfolio on London and key regional cities, we can expect to see growing demand.
After so long with little good news on this front, we take a look at the headline schemes set to invigorate retail across the UK.
A joint project between Hammerson and Westfield could change the dynamic of London satellite shopping centres. The developers are planning to merge Croydon’s existing Whitgift and Centrale schemes to form a 1.5 million sq ft centre.
The £1bn project, which is in the pre-planning phase, is intended to boost Croydon’s image as a retail destination in its own right and bring some much-needed new fashion brands to the area. Hammerson chief investment officer Peter Cole says: “This major scheme will be a catalyst in restoring Croydon to its role as the leading south London retail and leisure destination. Ensuring we have a strong fashion line-up as part of the mix will be key to the scheme’s success.”
The giant leaps taken by Westfield in London have piled the pressure on Bluewater, particularly in terms of fashion. And owner Lend Lease is responding by expanding the centre by a fifth, or 329,000 sq ft in real terms, with the extension of the mixed-use West Village area.
The plans are still being worked on, but Lend Lease wants to attract new fashion retailers to Bluewater. The aim, as head of retail leasing Guy Thomas says, is to create a “critical mass of new brands”.
Bluewater had a good year in 2013: Jack Wills opened its first shopping centre store there, while Topshop moved into a larger space, swapping its 12,000 sq ft unit on Lower Thames Walk for a 30,340 sq ft one in the Upper Rose Gallery.
Victoria Gate, Leeds
Leeds’ fashion reputation looks set to be cemented with a project getting under way this spring.
The Victoria Gate project is part of long-term plans in Leeds by landlord Hammerson, which owns the nearby Victoria Quarter.
By 2016, Leeds will have 398,000 sq ft of new retail space, which Hammerson says will be prime territory for retailers new to the city - not least John Lewis, which has signed up to be the development’s anchor tenant.
Buchanan Galleries, Glasgow
Glasgow is, like Leeds, hardly wanting for decent fashion retail space, but Land Securities and Henderson Global Investors are pressing home the advantage by adding a further 600,000 sq ft to the illustrious Buchanan Galleries. The project, due to complete by the end of 2017, is part of a wider reinvigoration of the Buchanan Quarter, which is proving to be a major pull for international brands and shoppers from miles around.
Last year, developer Intu was granted permission to add another 438,000 sq ft of space to Lakeside in Thurrock, an expansion of around a third. While details have yet to be revealed, Intu has said it wants to use the £180m extension for a mixture of uses.
Like Bluewater, Lakeside has had to up its game in the wake of Westfield’s London openings, and these more auspicious days look like the opportunity it needs to update the centre into the type of experiential space required today.
Land Securities and the Crown Estate only submitted plans for Westgate in September last year, but if all goes to plan Oxford is due for a big shake-up. The existing and tired-looking Westgate Shopping Centre will be almost entirely redeveloped, bringing 800,000 sq ft of new space to the city in 2017.
The Westgate Oxford Alliance is hoping to capitalise on the wealthy catchment area and bring in new fashion brands, with the type of modern space of which CBRE’s Mark Disney says Oxford has a “chronic shortage”.
Land Securities development director Bert Martin says: “By creating a stunning new retail destination, respecting the character of this great city, our ambition is to further add to one of the most attractive environments in the UK.”