Long term prospects
Published: 17 July, 2008
The current economic downturn is having a huge negative impact on retailers and retail property owners at present, and with so many new developments launching this year, the timing of the 'credit crunch' could not have been worse.
But that's not to say it's all doom and gloom. Developers planning ahead for future projects are not daunted by the current retail climate, instead choosing to take the long-term view.
In Sheffield, Sevenstone, the city's major long-term development by Hammerson, which involves total regeneration of the heart of the city, is still planned to go ahead. The 860,000 sq ft of prime retail space, anchored by a 260,000-sq ft flagship John Lewis department store, is on track to start on site later this year. Completion of phase one is expected by 2011; phase two by 2013. A total of £600m is being invested in the retail quarter of Sheffield city centre.
Brendan Moffett, the director of strategic marketing at Creativesheffield - the city's development agency - is not concerned about the current climate as he believes this to be a long-term development. "We will ride it out," he says. "Economic circumstances change over time and we're building for the future. I don't think we're too perturbed by the current relatively short-term economic situation."
Chief executive of Sheffield City Council, John Mothersole, adds: "Right from the start we've always expected there to be one economic cycle in the life of designing and building Sevenstone. Now it's happened, but we and Hammerson are working closely to make sure the development proceeds, and as far as we're concerned it's starting on site later this year."
And developers are still forging ahead with schemes due to open as early as next year.
Thornfield is showing huge confidence in the market by ploughing ahead with two developments, thanks to a funding package worth around £300m from Bank of Scotland. Last month work began on the 1.6 million-sq ft regeneration of Bury Town Centre, in Greater Manchester. The retail-led, mixed-use, development, known as The Rock, which includes 550,000 sq ft of retail space anchored by Debenhams and Marks & Spencer, will open in summer 2010.
The £300m funding package also includes approximately £20m for the development of Thornfield's 270,000-sq ft Thornaby town centre regeneration project - anchored by Asda and now 80 per cent pre-let - which started on site at the end of April 2008 and is due for completion in spring 2009.
== a strong signal ==
Jason Marcus, chairman of Thornfield Properties, says: "We are delighted to be announcing the main start on site for these important regeneration projects. It sends a strong signal to our council partners and to the marketplace in general, that we're well set to deliver major projects in the face of tough market conditions. We're very confident in the quality of our schemes and are prepared to take a long-term view to back up that confidence."
Meanwhile Westfield has also started enabling works on site at Bradford, despite the slowdown in the market. The 600,000-sq ft development is being anchored by Debenhams and M&S and other retailers include the whole of the Arcadia Group and Next. Westfield's Peter Miller is confident the scheme will be well let by the time of opening at the end of next year. "We have a scheme that's viable and we believe there's an opportunity in that market," he says.
