Future proof
Published: 30 September, 2008
BCSC has updated its research on the importance of the retail property sector in the UK economy. The report highlights the shift in the nature of shopping places away from the out-of-town model towards town centre developments.
The report, carried out for BCSC by Graeme Cormack of Experian, shows that despite fears over a current slowdown in retail sales, the UK retail property industry is set to fare well over the coming years. Investment is continuing in new developments, and openings will continue at a high level during this year and next.
Experian calculates around £5.3bn was invested in the UK malls in 2007 and investment has more than doubled since 2000.
There have already been a number of high profile openings this year, including Victoria Square in Belfast, Grand Arcade in Cambridge, Highcross Leicester, Houndshill in Blackpool and the first phase of Liverpool One. And Eagles Meadow in Wrexham, Cabot Circus in Bristol and Westfield London will open during the final few months of 2008, as will phase Two of Liverpool One.
Yet with retail expenditure expected to grow by 18 per cent to £370bn by 2013, BCSC predicts that the influx of additional retail floorspace will be readily absorbed into the market over the coming years.
Especially important for the shopping centre sector is the forecast that expenditure on comparison goods is expected to grow by 25 per cent over the next five years, with higher levels of expenditure growth forecast for the key clothing and audio visual categories. But the convenience goods market will grow by just 3 per cent over the same period, with expenditure on tobacco and newspapers likely to decline.
However, not all this new trade will be captured by shopping centres, the report warns: by 2016 the online trade in comparison goods is expected to quadruple to 16 per cent of the market from today's 4 per cent.
The report also confirms the shift away from old-style covered, out-of-town shopping centres towards town centre retail-led developments that are more integrated with their surrounds. More than 5 million sq ft of town centre retail floorspace is planned every year from 2009 until 2012, although developers are delaying a number of schemes in the hope of an economic recovery.
The report highlights Highcross Leicester and Cabot Circus in Bristol as examples of how retail-led schemes that combine shops with leisure and housing can act as the catalyst for town centre regeneration. According to BCSC's report, this style of mixed-use development will become the predominant form, overtaking pure retail schemes by 2011.
BCSC chief executive Michael Green says: "This report shows what a crucial role the retail property industry plays in the UK economy. It currently employs 7.6 million people and as the economy slows its continued investment is crucial for creating jobs in towns and cities across the country.
"The nature of shopping places has also changed. They are now an integral part of the urban environment ensuring our town and city centres remain vibrant and at the heart of our communities."
