In Kendal, preliminary site works are just about to begin on the redevelopment of the old K Village outlet mall, which Realm sold to an Anglo-Irish consortium led by the Guinea Group. Clarks, a long-term occupier of the site, has signed up to anchor the new scheme and, according to the Guinea Group's managing director John Drummond, occupier interest is strong.

The 4.5-acre riverside site is being redeveloped with a multi-level mixed-use scheme including a premium factory outlet centre, five restaurants and cafés fronting onto the new riverside walk, over 500 underground car parking spaces, a 5,000 sq ft heritage centre, offices and 120 apartments.

The existing centre will be closed and demolished in February 2007 and the new scheme will open in 2008.

In Gloucester, the city council has granted outline planning permission for the £200m Gloucester Quays scheme, which includes a factory outlet centre. The regeneration scheme, a joint venture between British Waterways and Peel Holdings, aims to breathe new life into a largely derelict area at the northern end of the Gloucester and Sharpness Canal. The 200,000 sq ft outlet centre will be built along with a new campus for the Gloscat college, as well as apartments, a Morrisons supermarket, a hotel, bars, restaurants and offices.

But by far the biggest outlet development underway in the UK is The Outlet, a 205,000 sq ft mall that's taking shape beside the A1 Dublin-Belfast road. The project is the brainchild of the Guernsey-based Orana Group, and has been forward-sold to Land Securities.

The development has just secured its final anchor tenant in the form of Nike, which has taken a ten-year lease on the 9,041 sq ft Unit 41. Other retailers already committed to the scheme include Ghost, Jospeh, the Designer Studio, ex-Z, Marks & Spencer, Olsen, Nitya and Ravel.

Commercial director Jo Skilton says: "Nike is a great addition to our already enviable fashion mix. We have a great deal of interest in the remaining units at the scheme and expect to announce further lettings in the coming weeks."

Markham Vaughan Gillingham and DTZ McCombe Pierce are joint letting agents.

According to Orana's managing director John Farmer, the Outlet is only part of a much more ambitious development. An application is about to go in for a second phase of leisure and retail totalling 400,000 sq ft, and an occupier has been lined up for a third of that already. Farmer is still buying in adjoining land for a third phase of development. The Outlet received a major boost with the news that ING Real Estate Development had abandoned its plans to develop the166,705 sq ft Ballymac shopping outlet in Dundalk, just across the border in the Republic.

Delays caused by Ireland's convoluted planning system finally scuppered the scheme, which had already secured pre-lettings to Next, Antler, Paper Mill, Book Depot and leading Italian brands Mandarina Duck and Basile.

ING's decision leaves The Outlet with a clear run, its only rival now being Junction One in Antrim, which is owned by the same consortium that's redeveloping Kendal. According to Drummond, new retailers are keen to get into the scheme even ahead of the planned second phase, and recent signings include Ravel - taking its first store in Northern Ireland - and Text.

Elsewhere the focus is now on extending and upgrading existing schemes, and Thornfield Properties has recently won consent for a second phase at its Springfield outlet centre in Spalding, Lincolnshire . The proposed extension will provide a further 25,000 sq ft of ground-floor retail space over 10 units, with a hotel at first and second floors, where terms have been agreed with an operator. The 140,000 sq ft first phase has recently attracted two new tenants in the form of Tchibo and ex-Z.

Tchibo has taken 2,150 sq ft on a new 10-year lease on base and turnover rents for its first-ever outlet mall operation. And ex-Z, the independent retailer licensed to dispose of surplus Zara stock, is taking 4,000 sq ft. The arrivals follow the opening of Farah's first outlet store at Springfield in May 2006.

Other tenants include Marks & Spencer, C&J Clark, Reebok, Costa Coffee, Mexx and Suits You. Markham Vaughan Gillingham is letting agent and Capital Retail advised Tchibo.

Other UK operators and developers are having to look overseas for new opportunities. For instance, specialist outlet operator Pantheon Retail has just received unanimous agreement from the CDEC commission in Bordeaux to begin work on its latest retail project, Parc du Cubzac.

The 32,000 sq m site will open in phases. The first phase of 14,000 sq m is scheduled to open in March 2008. Situated in the heart of France's premier wine-growing region - just 30 minutes from St Emilion and other major wine destinations and 35km to the north of the city of Bordeaux - Parc du Cubzac is well placed to enjoy strong tourist traffic and there will be parking for 1,750 cars.

Meanwhile in Ringsted, Denmark, Miller Developments is rolling out the latest Premier Outlets Center. Even though main construction is only just beginning, retailers including Levis, Filippa-K, Marc Picard, Mover, Samsoe & Samsoe, Echo, VF Corporation, Friis & Co, Quiksilver, Mango and Garduer have all signed up to take space at the scheme, which Miller is developing in partnership with TK Development.

The 7.5 ha scheme received full planning consent in February 2006 and will comprise 129,000 sq ft of prime factory outlet accommodation just a 45-minute drive from Copenhagen.

Phil Miller, chief executive of Miller Developments, says: "We are on course with our build schedule and making great progress with our pre-letting activities. We expect to announce a range of international and local tenants in the near future and we're looking to open the centre itself in autumn 2007."

GVA Grimley is retained agent on the scheme.

The move into Denmark follows the successful completion of the first Premier Outlet in Budapest, Hungary, which Miller developed in partnership with the Austrian bank Raiffeisen Ingatlan.

The retail outlet centre currently comprises two completed phases, with a third phase in proposed form. Phase One totals 52 units across 13,500 sq m (145,300 sq ft), while Phase Two has 30 units across 4,800 sq m (51,600 sq ft).

Tenants include Levis, Morgan, Nike, Adidas, Mango, Puma, Calvin Klein and Pepe Jeans.

The scheme has recently been sold to Morley Fund Management's Aviva Central European Property Fund for over ?70m and a net initial yield of 6 per cent.

Phil Miller says: "The Premier Outlet Center in Budapest is a great illustration of how Miller works in partnership with local developers to produce high quality schemes which the market will pay a premium for."

GVA Grimley acted for Miller and Raiffeisen, King Sturge and SachsenFonds acted for Morley.

The international dimension

Linda Humphers, editor in chief at the International Council of Shopping Centers, presented an overview of the global outlets business at the ICSC's research conference in Prague last month.

"With 364 outlet centres in 29 countries, and more being planned worldwide, the factory outlet centre business is here to stay," she said.

ICSC calculates that 225 of these centres are based in the USA, which is a decade in front of the rest of the world in FOC development terms. The organisation estimates that in Europe, 66 centres totalling 1.3m sq m are already open, another 23 centres planned and seven expansions due to open by the end of 2007.

"Clearly the popularity of this format is growing, so expect to see new factory outlet centres opening, particularly in southern and central eastern Europe over the next few years, bigger, better and more sophisticated than ever before," Humphers said.

The UK is Europe's most mature market, and its 35 factory outlet centres are an established part of consumer life. However, according to ICSC, there is little planned expansion, due perhaps to developer concern about potential over-supply and definitely in view of tough planning controls.

The question is whether the UK will follow the lead of the US, the most mature FOC market, where the number of outlet centres has levelled out, and, keen to maintain income revenue, some owners are welcoming in any retailer, confusing the customer as to the centre's true identity.

The US definition of a factory outlet centre is one which has at least 50 per cent factory outlet occupancy, but in some centres this is no longer the case as the amount of true factory outlets are diminishing to make way for run-of-the-mill retail offerings

"While there is a clear upward trend for FOC development, the industry certainly isn't free of issues - and with a tough retail trading environment across high streets, shopping centres and factory outlet centres, who are all vying with each other and the internet for every dollar, euro, pound, ruble or other currency, tough decisions are having to be made to maintain or boost revenue," Humphers concludes.

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