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Property Special: New developments on the horizon

Talk of growth in the economy seems premature, with figures revealing a slowdown in the number of developments being built. Look closer though and the picture is more positive.

For fashion retailers hunting for additional space, at first glance the figures from property consultant cBrE’s Shopping Centre Pipeline report published in December 2014 make for uncomfortable reading. They show the pipeline is at its lowest level for 15 years, and is just scraping 40% of pre-recessionary levels, with 42.47 million sq ft in total. compare this downturn with the last major slump, in the early 1990s, and another unwelcome trend emerges (see table).

In the 1990s, at this stage - the second half of the eighth year since the downturn began - construction was well on its way back up, having
increased by 4.2 million sq ft on the second half of year seven. By comparison, at the end of 2014, growth had stalled. however, Mark Disney, executive director for shopping centre development and leasing at cBrE, says there are good reasons for the more modest pipeline: “In the past, consent for large
developments was easier to come by; now it has to be much more circumspect.

That’s why development is now mainly happening where there is the biggest mismatch between what the city currently has in terms of retail against what it could actually offer to meet consumer demand and prevent leakage to competing centres. “Key markets such as croydon, Glasgow and Oxford are some of the last to get approval for major new developments to plug that GAP. and there are a few places like Nottingham that are still in need of more space. People have been talking about major new development in these locations for 15 years and they are now feeding through” a more detailed breakdown of schemes shows that while there are few purely new developmentsof the size seen leading up to the downturn, there is plenty of - albeit more modest - activity on the redevelopment and extension front.

John Platt, principal consultant at professional services firm cacI’s property consultancy division, says this is part of a new phase, with both developers and shoppers returning to the smaller town centre schemes rather than dominant regional mall destinations, he says: “This resurgence of the more local centre reflects cacI’s analysis on consumer behaviour.cacI’s Shopper Dimensions report shows that regional malls were the destinations least aff ected by the recession, but over 2014 we saw an increase in average retail and catering spend, conversion rate and dwell time across town centres. “This trend shows there is a growing opportunity for retailers to perform well in newly extended and refurbished local centres.”

On the planning list

1.5 million sq ft
Developers Westfield and Hammerson
Completion date Not specified
Key retailers Yet to be confirmed, but we understand Marks & Spencer will stay in the town and anchor the northern end of the scheme.

Not content with its extension plans at Westfield London, shopping centre operator Westfield has teamed up with landlord Hammerson to redevelop Croydon’s Whitgift Centre, a £1.25bn to £1.5bn investment. In the longer term the revamp will incorporate the adjacent Centrale shopping centre. The proposed 1.5 million sq ft scheme will house “a major department store”, with John Lewis having already stated its interest - it is now in discussions with Westfield and Hammerson. There will be around 300 shops, designed to accommodate retailers of all sizes, and 5,000 permanent jobs created.
Planning was approved by Croydon council in November 2013 and work is expected to start next year. Marketing will commence shortly, once the compulsory purchase order process to secure full control of the site has been completed, something that is expected in the next few months.


Size 580,000 sq ft of retail and leisure
Developers Legal & General, Schroders and Bracknell Forest council
Completion date Spring 2017
Key retailers Fenwick, M&S, Primark, H&M Construction is just starting on the redevelopment of Bracknell town centre in Berkshire. By 2017, there will be 50 new retail and leisure units, including an 80,000 sq ft Fenwick store, and 80,000 sq ft Marks & Spencer, a 48,000 sq ft Primark and a 26,000 sq ft H&M.

Fenwick chairman Mark Fenwick says the scheme is likely to “fundamentally change” the town. This is exactly what Simon Russian, head of retail development at Legal & General, says was the objective when the partnership set out. The scheme secured local council approval in 2012. He says: “There’s been no development in the town centre for such a long time and the fashion offer at the moment is behind what you’d expect from a place like Bracknell. We’re hoping to provide the space for those brands that you’d expect to be there.”



Size 800,000 sq ft
Developers Westgate Oxford Alliance (Land Securities and The Crown Estate joint partnership)
Completion date Autumn 2017
Key retailers John Lewis, H&M, Superdry, Schuh, Primark, Next, Michael Kors

After more than four years in the planning, redevelopment and extension work on Westgate will begin this spring. The £440m overhaul in the historic university city promises more than 100 extra units. The affluent catchment and strong flow of tourists are well known; now the developers
hope to give Oxford a retail status to match. The largest development in the retail pipeline, Oxford is one of the last of a wave of major city centre schemes, and the opportunities for fashion retailers are going to be big. It is already 28% pre-let. Land Securities leasing director Naomi Howard says: “We’re looking to get a reallyexciting mix of national and international brands in the centre; there are a lot of retailers that haven’t opened up outside London before.”



Size 300,000 sq ft with extension
Developer Hammerson
Completion date Autumn 2015
Key retailers Debenhams, M&S, Next, TK Maxx

Elliott’s Field is the smallest of the new builds featured, but it has the same purpose: to maximise the potential of its surrounding area. The £36m
extension and redevelopment project is being delivered by developer Hammerson, which began work in September last year. The scheme will take the retail park up from 136,700 sq ft to 300,000 sq ft and will introduce 18 new shops in a bid to attract more of the 450,000-strong catchment around Rugby. Hammerson development manager Tom Cochrane says: “We’ve designed a scheme that suits fashion retailers and allows them to complementstore offerings at large shopping centres in the region.”



Size 390,000 sq ft
Developer Queensberry Real Estate
Completion date November 2015
Key retailers Debenhams, Topshop, H&M, River Island

Newport’s 2020 Vision regeneration masterplan gives an ambitious view of the Welsh city’s future. Key to this is the transformation of its retail scene, which has traditionally been eclipsed by those of nearby Bristol and Cardiff. Developer Queensberry’s commercial director Stuart Harris says the regenerative power of quality new retail space cannot be overlooked: “Newport is a really good model of how you should approach regeneration.“It has been in decline for most of the last 20 years. It’s not just about putting in a retail offer; it’s making that space work with surrounding features like the theatre, the university campus and the leisure centre. It’s about giving retailers the confidence to go into the city. ”The regeneration has been a longtime coming and the fashion offer isundoubtedly below what it should be. The fact that some big names like H&M and Next, which had exited the city in favour of out-of-townlocations, have now been encouraged to come backby the prospect of Friars Walk is a sign that things are looking up. The scheme will provide 34 newshops and is already 65% pre-let. It is just a two-minute walkfrom the campus of the University of South Wales.



Size 600,000 sq ft extension [comprises 550,000 sq ft retail and 50,000 sq ft dining]
Developer Westfield
Completion date Christmas 2017
Key retailers John Lewis

Westfield London opened with great fanfare in 2008, and now major work is under way on a 665,000 sq ft extension costing
£1bn. The Australian shopping centre operator is creating a new residential quarter and expanding the retail and leisure facilities, with the addition of a John Lewis flagship. Early prep work will start this year, with construction expected to begin at the end of this year. The first phase of residential will also be complete at the time of opening. No other retailers have been announced as yet, nor how much space has been pre-let, but the development will take in another 70 retailers.



Size 250,000 sq ft
Developer Aquila
Completion date Autumn 2016
Key retailers John Lewis, Monsoon, Fat Face, Joules

In January, developer Aquila moved in after a lengthy process of acquiring the Bond Street Chelmsford site. By autumn next year, it will have
altered the retail landscape, with an extra 250,000 sq ft across 20 shops. These include John Lewis, which will open a smaller, flexible format of around 90,000 sq ft, the company’s first store in Essex.Other retailers signed up include Joules, Monsoon and Fat Face, and talks are ongoing with more. Aquila consultant Neil Ridley says fashionwill feature highly. Some 70% of the space has been pre-let, with the remaining stores aiming to attract mid-market fashion brands. The scheme is the first majordevelopment in Chelmsford for 20 years and will include leisure and dining space.



Size 1.2 million sq ft with extension
Land Securities
Completion date Winter 2017
Key retailers Existing retailers include John Lewis, Next and Oasis

With full ownership of the Glasgow centre secured in a deal last October, Land Securities is in the process of expanding Buchanan
Galleries. The redevelopment will double the existing floor space and open the door for more big brands, including Mango and Superdry.
The redevelopment, expected to attract mid-market fashion retailers, will cost around £350m and add 10 retail and leisure units to the
existing 90. Leasing is under way,but M&S has already signed up to join John Lewis as the second anchor retailer. It is part of a wider strategic approach by Land Securities to focus on fewer, more dominant centres, and will help Buchanan Galleriestake a bigger slice of the retail spend around Glasgow.



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