Shopping centre activity remains subdued – Cushman & Wakefield
The development of shopping centres in the UK last year was subdued with only five new schemes and six extensions opening, says Cushman & Wakefield in its new research on the sector. The firm expects development to remain modest this year and warns that 2012 is likely to see a sharp slowdown in activity.
In 2010, the new developments added just over 227,000 sq of new shopping centre space, with extensions and redevelopments of existing centres representing 45% of the total new space added. This year, just over 260,000 sq m of new shopping centre space is scheduled to open, but this figure has been boosted by the 176,500 sq m Stratford City scheme in London, on which work had begun before the economic downturn took hold, C&W notes. Shopping centres due to open this year in addition to Stratfield City include Trinity Walk in Wakefield (46,500 sq m) and the Parkway in Newbury (25,000 sq m).
In 2012, only 53,000 of new space is currently scheduled for completion – but Cushman & Wakefield notes that many developers do not comment on the status of their project pipeline and so it is difficult to project more than 12 months into the future with any reliability. However, it notes that apart from the Trinity Leeds project from Land Securities (due in 2013) and the Tesco centre in West Bromwich (due in 2012), no major projects have begun construction in recent months.
Among the schemes that opened in the UK in 2010 are The Rock in Bury (50,000 sq m); the extension of Eldon Square in Newcastle-upon-Tyne (38,000 sq m); One New Change in London (nearly 20,000 sq m) and St Catherine’s Walk in Carmarthen (26,000 sq m).
Toby Sykes, Partner – Retail Services, Cushman & Wakefield said: “There is great potential in the current retail development market. The lack of supply of new retail space, coupled with strong demand from leading retailers, is a real opportunity for landlords. They must however, build to requirements and avoid oversupply. From our experience leasing Trinity Leeds for Land Securities at present, it is clear to us that there is considerable demand for the right development product.”
Kristina Gorkovskaya, Research Analyst in Cushman & Wakefield’s European Research Group, said: “Whilst current data shows that completions will come to a virtual standstill in 2012, demand for prime retail space remains resilient. The limited supply of new space coming onto the market should support prime rental levels going forward. Work on Trinity Leeds restarted in August, and other projects that were put on hold during the economic downturn may be resumed to meet demand for new space.”
