Ground-breaking

Over the next five years the UK is in for an unprecedented development boom. Graham Parker takes a closer look

Published: 01 June, 2007

Page 4

News that Westfield has brought forward the opening of its Eagle Centre extension in Derby from spring 2008 to autumn 2007 has once again focused attention on the crowded shopping centre development pipeline over the next five years.

Lunson Mitchenall monitors development activity on behalf of the BCSC. It calculates that 14 million sq ft of shopping centre floorspace is currently under construction and of this 7.5 million sq ft is due to open in the next 12 months. Another 14 million sq ft has planning permission and the total pipeline - schemes either on site or in the planning stage - stands at 49.51 million sq ft in more than 140 different developments across the UK.

And that's just the retail content. Because mixed-use is now a prerequisite, most schemes incorporate other uses, and therefore the total amount of commercial space that the latest crop of shopping centre schemes will create is a massive 75.34 million sq ft. On top of this 36,000 residential units will be created, with 17,000 of those destined for London.

Although it's clear that the shopping centre industry is entering an unprecedented development boom, Lunson Mitchenall points out that around 35 per cent of the new floorspace will replace existing retail developments, suggesting an actual net increase in retail space of about 33 million sq ft. That's still the equivalent of nearly 20 MetroCentres.

BCSC chief executive Michael Green says: "The UK continues to maintain a dynamic pace on the pipeline development front and these statistics clearly illustrate the industry's race to offer fresh, accessible, inviting retail-led places in order to meet customers' complex expectations. A significant proportion of pipeline development may well be replacement space, but this just serves to underline the industry's commitment to careful reassessment and renewal - particularly important in view of the intense competition for shoppers' time and loyalty."

The actual number of centres opening each year between now and 2012 is remarkably consistent: 20 new centres are expected to open in 2007; 16 in 2008; 17 in 2009; 27 in 2010; 18 in 2011; 20 in 2012 and 15 thereafter.

But what makes a difference is the size of the centres. 2008, for instance, will see the opening of four centres over 600,000 sq ft including Westfield London and Cabot Circus in Bristol, both of which are over a million sq ft. And Liverpool One will deliver almost 2 million sq ft. For this reason, there will be significant peaks in the amount of floorspace delivered in 2008; 2010 and 2012. Overall these major schemes represent over 40 per cent of all the space in the pipeline.

Lunson Mitchenall director Neil Mitchenall comments: "Our analysis highlights both the length of time it takes to deliver the space proposed as well as the fact that the concentration of this space is in larger schemes predominately in major city centres. It demonstrates a commitment by developers to take a long-term view in seeking to deliver complex and challenging developments - now mainly mixed-use - that make wholesale changes in the retail offer in a given location."

2008's openings in Bristol, Liverpool and London also show how city centres can be regenerated and recapture consumer spend," he adds.

Although the agents remain confident that the UK retail market can absorb the influx of new floorspace, the picture varies from region to region. Glasgow looks to be at most risk of local oversupply: in addition to Silverburn, major extension works have started at the St Enoch centre. And a similar extension is planned for Buchanan Galleries which means both schemes will break the million-sq ft barrier. And the north-west of England looks to be in for a challenging few years. Already this year, Grand Arcade in Wigan and Golden Square in Warrington have opened, and both have let well. But looking ahead towns, from Altrincham and Crewe in the south to Lancaster and Blackpool in the north, have substantial schemes in the pipeline.