St David's 2 in Cardiff
Wales and the West: New shopping centre developments prove that one region can fight the recession
Published: 27 August, 2009
No other region of the UK can boast three new shopping centres about to open, but Wales and the West Country are the UK’s two remaining hotbeds of development activity. St David’s in Cardiff, SouthGate in Bath and White River Place in St Austell are all due to open this autumn, and that means big changes for the region’s retail infrastructure.
Cabot Circus in Bristol opened a year ago, and it has pushed Bristol back up the regional hierarchy, successfully restoring the city centre’s primacy that had previously been surrendered to the Mall at Cribbs Causeway.
The recent opening of Primark’s second-biggest store in Broadmead drew massive crowds, and it has undoubtedly strengthened the Bristol offer. But Bristol is going to need all the help it can get this autumn as it faces a pincer movement from new projects to the east and west.
By far the biggest and most dramatic new scheme is St David’s in Cardiff, where Land Securities and Capital Shopping Centres, operating as the St David’s Partnership, are investing £675m to create a spectacular new retail destination.
‘Dominance’ is a current buzz-word among investors, with the theory that the biggest and best centres, that truly dominate their catchments, are the ones that will outperform in troubled times. And it’s certainly an epithet that can be applied to St David’s: on completion the 1.4m-sq ft scheme will create one of the largest centres in the country.
The extended centre will represent 39 per cent of the total retail floorspace in the Welsh capital. Experian forecasts St David’s will promote Cardiff into the UK’s top ten retail destinations: the existing centre already draws 22 million visitors annually, and the extension is expected to boost this to 35 million.
On completion St David’s will be anchored by three department stores – John Lewis, Debenhams and Marks & Spencer – with around 180 further stores. The 260,000-sq ft John Lewis store is now fitted out and merchandising is under way ahead of its 24 September opening day. It will become the biggest John Lewis store outside London and the partnership’s first branch in Wales, opening almost a month ahead of the rest of the centre which will welcome shoppers from 22 October.
At the same time Marks & Spencer has completed a £20m refit, including a prominent new entrance to the prime Queen Street pitch, and Debenhams has extended its store by 100,000 sq ft giving it a frontage onto the new mall as well as refurbishing its existing space to reflect its latest store design.
And the St David’s Partnership has done its bit, too, spending £50m on a rolling refurb of the original centre to replace all the floors, ceilings and signage to ensure a seamless transition from the old to the new. All the work has been carried out at night to avoid disrupting trade.
“It’s already paying off,” says development manager Norman White. “Footfall’s been up for four consecutive months now.”
Land Securities’ White is responsible for construction, while Capital Shopping Centres has recruited former airports and outlets specialist Jo Skilton to lease the new space. White takes obvious pride in the project as it enters the home straight. Increasingly the main contractors are finishing off while shopfitters are beginning to dominate the site and as the wraps come off it’s possible to see what a dramatic space has been created.
The new mall curves gently beneath a sinuous barrel-vaulted glass roof stretching 205m from the existing centre in the north to the new John Lewis store to the south. White says the centre is designed to improve circulation through the city centre, with three new east-west routes opening up, cutting across the main mall. He points out that, although St David’s is a covered scheme, it delivers the permeability that has become a feature of the latest generation of open-air malls.
The scheme will provide over 100 new shops with 25 new restaurants. The leasing campaign has been taking place against a challenging backdrop, but leasing manager Jo Skilton says the scheme is now 64 per cent let, with more deals in the pipeline.
New Look and H&M were the latest fashion anchors to sign, and they have just been joined by Cult, which offers labels including Superdry, Paul’s Boutique and California Surf Company. It is to open a 13,584-sq ft store, its largest shop to date. Other aspirational fashion stores include All Saints, Hugo Boss, Kurt Geiger and Quiksilver. Letting agents for St David’s are E J Hales, Lunson Mitchenall and Cushman & Wakefield.
And Skilton is at pains to emphasise that there has been minimal cannibalisation of Cardiff’s existing retail offer. “Of course some retailers will be re-considering their existing locations within the city,” she says, “but St David’s has convinced many retailers that Cardiff should be a two-store city.”
But what has it cost the partnership to achieve the level of lettings it has? Skilton refuses to be drawn on quoting terms, just saying “every deal is tailored individually.”
The new development will include a greatly expanded catering offer, focused around the Eastside area with some additional units on The Hayes facing the new library, built under a Section 106 agreement. The Eastside mall has a different look and feel to the rest of the centre with wooden floors, perhaps closer to a hotel
lobby than a retail environment.
The aim is that it will trade for longer than the main centre, serving long into the evening as customers pass from the centre’s car parks to the adjacent cinema and the Cardiff International Arena concert venue across the road.
In all St David’s will have 3,000 new parking spaces with 2,350 above the new mall and 650 in an underground facility beneath the John Lewis store. And according to White the St David’s car parks will undercut the NCP-run car parks in the rest of the city centre. “We have the spaces and the prices to serve the shoppers,” says White.
The St David’s Partnership is also extending its reach beyond the scheme itself by taking over the management of The Hayes, which runs up the west side of the centre. Once little more than a glorified taxi rank, it has been pedestrianised and is already emerging as an attractive location for dining and drinking. Jamie Oliver’s new restaurant chain, Jamie’s Italian, is one of the brands that has taken space on The Hayes frontage of St David’s with Gourmet Burger Kitchen and Wagamama already trading from the ground floor of the new library.
So what is the likely impact going to be on retail in the rest of Cardiff thanks to all this new space? Sapphire Retail Fund, owner of Queens Arcade which forms a key link between Queen Street and St David’s, has been refining its leasing and marketing strategies to take advantage of the opening of the St David’s extension.
Queens Arcade has commissioned research from Javelin Group and Atkins Intelligent Space, which found that over 90 per cent of Cardiff shoppers usually visit Queen Street and almost all those questioned stated they will visit at least as frequently once St David’s is extended. The consumer research further suggests that 7 per cent of respondents will visit ‘more often’ once St David’s opens.
Springboard figures show that Queens Arcade had 14.3 million visitors in 2008 and the centre’s management team expects this to grow on the back of the new investment in St David’s. In anticipation of this, refurbishments have improved access, sightlines and signage between Queens Arcade and St David’s, and Sapphire says any future redevelopment or rejuvenation works will be targeted at continual improvement of traffic between Queen Street and St David’s Centre via Queens Arcade.
So while Queens Arcade is likely to benefit, local observers have expressed concern about the impact of St David’s on the Capitol shopping centre, located at the eastern end of Queen Street.
However Leigh Burnett from Plus Shops, managing agent at Capitol on behalf of landlord Moorfield, is unconcerned, pointing out that the development of St David’s 2 was actually one of the main reasons that Moorfield invested in the Capitol Shopping Centre.
“By attracting even more shoppers to Cardiff, we believe the development of St David’s will strengthen Cardiff’s reputation as a leading retail destination and benefit the retail community as a whole,” Burnett says.
St David's Eastside
The Capitol has long established itself as a fashion destination with a strong and loyal customer base. “We are differentiating the centre through the creation of a ‘boutique’ offer, designed to capture customer appetite for new brands and unique stores,” explains Burnett. The new initiative has already succeeded in attracting independent retailers, such as Eden Park and Elephant & Flowers.
“This will set the Capitol apart and act as a key differentiator between the centre and St David’s,” concludes Burnett.
The region’s other major new project is the 417,000-sq ft SouthGate in Bath, developed by a joint venture between Multi Development and Aviva Investors. A development saga that has stretched over two decades is about to deliver Bath’s largest shopping centre and its first since the 1970s. As the 65 new shops take shape the anticipation is palpable.
The new space is being delivered in three equal phases and the first will open on 4 November. The second will follow in May 2010 with the third opening in September 2010.
Developing a project of this scale and complexity in the middle of an historic city is no mean feat, and the man charged with delivering the project is development manager Jon Munce.
“Only Venice has the same level of protection as Bath,” he points out. “Nowhere else has an entire city been designated as a World Heritage site.” That means every element of the project has come under detailed scrutiny and it has been designed to harmonise with Bath’s signature Georgian architecture.
“SouthGate is not a shopping centre in the traditional sense,” explains Munce. “Rather, it’s a new shopping quarter for the city with six individual buildings linked by open streets and squares.”
This autumn’s phase consists of three of the new buildings. Block C consists of three MSUs which have been taken by a Sainsbury’s store, a 30,000-sq ft two-level Boots and a 20,000-sq ft New Look. Block B has a large store for H&M and a range of smaller units and Block A is predominantly smaller stores. In all 30 stores will be complete this Autumn. Two more buildings will open in the spring, before the final element – the 125,000-sq ft Debenhams anchor store – opens in a year’s time.
Munce is particularly proud that the 860-space underground car park has been completed six months ahead of schedule. This means that it will open as part of phase I this year rather than phase II next year and he believes this has given new impetus to the letting campaign.
“Phase I will be 75 per cent let by floorspace on opening day,” he forecasts. “Retailer interest has been strong throughout and that’s down to the ‘Bath effect’ – there’s huge footfall with 3m to 4m tourist visitors a year.
“For retailers looking to get into Bath the problem has been finding the right space,” he adds. “We’re delivering something that hasn’t been on the table before.”
And Munce detects a lightening of the mood among retailers in recent weeks. “Our experience was that from last autumn until Easter basically nothing happened. But now we’re making progress,” he says.
Another element of the SouthGate project is the upgrading of Bath’s public transport infrastructure. The scheme occupies the site of the city’s old bus station, and this was relocated to a temporary facility in a car park while the new bus terminus was built as part of SouthGate. The new facility has now been handed over and according to Munce is running smoothly, and the temporary bus station is now being reinstated as a car park.
And next year work will begin on a £10m upgrade of Bath Spa railway station, again as part of the wider South Gate project.
“We’ll be creating a new public square at the southern boundary of our site, and opening up the railway arches to from a new restaurant quarter for the city,” says Munce. “Basically every visitor to Bath coming by train is going to pass through SouthGate.”
CASE STUDY: SURFING THE WAVE OF REGENERATION IN ST AUSTELL
The town centre of St Austell in Cornwall is about to be transformed by a major new retail-led regeneration project which will open on 29 October.
The £75m White River Place development, by White River Developments, the South West Regional Development Agency and Elan Homes, will provide 155,000 sq ft of new retail and leisure facilities across three storeys with approximately 20 new stores.
White River’s Sean Finlay believes it will deliver a step change in St Austell’s fortunes. “The reason we invested in St Austell is it’s the biggest town in Cornwall, but in retail terms it’s always been second-best to Truro,” he explains. “We’re quoting rents on a par with the rest of the town centre at £45 to £50 zone A. That compares with £150 zone A in St Austell.”
And that seems to have struck a chord with retailers, because White River Place has established a strong value-led retail line-up which includes Peacocks, New Look, Starbucks, Wilkinson, and Bon Marche. The scheme is currently 65 per cent let and in the latest deal, the Eden Project – Cornwall’s biggest visitor attraction – has taken 4,000 sq ft for a café, ticket sales point and an education facility.
“We’ve succeeded in attracting tenants because we’re affordable,” says Finlay. “And because the scheme is open-air we’re able to keep the service charge low.”
Just as British holidaymakers are rediscovering the joys of the ‘staycation’, it seems that retail brands are once again recognising the benefits of a trip to Cornwall.