In Cardiff, works have started on the development of St David's 2 and complete refurbishment of the existing St David's centre, which is expected to be complete by autumn 2009.

Owned by the St David's Partnership - a joint partnership between Land Securities, which has responsibility for the project management and build and will also manage the asset once it is built, and Capital Shopping Centres, which is in charge of leasing - the £675m development will provide a 260,000-sq ft John Lewis store, 100 brand new stores, 21 catering units and 2,500 car parking spaces, taking the scheme up to 1.4 million sq ft.

Designed by Benoy, the new development is formed of a series of streets and arcades, having taken its inspiration from the 11 arcades found throughout the city centre. In addition, the Partnership is building a new library block with three catering units which have been let to Strada, Wagamama and Gourmet Burger Kitchen, 304 luxury apartments above the scheme and 30 affordable homes. It is also redeveloping The Hayes area which will have a focus on high quality shopping, living and eating in the heart of the city.

"It's all about connectivity," says Helen Morgan, marketing manager for St David's and St David's 2. "In the past all the retail has been focused towards the northern end and outside dining has been focused away from that, so we're connecting everything with the arcades and extending the retail into this area."

Through the development, the Partnership hopes to expand the catchment of Cardiff to beyond the valleys and Newport and also prevent the current leakage to Bristol. It is hoped that tapping into the tourist market will take Cardiff into the top five in the UK retail rankings.

Morgan explains: "Dwelltime at the moment is 47 minutes but average spend is £45. People are hitting the shops, getting what they want and running. We want to increase dwelltime and we want it to be a destination. We want to liven up the city after 6pm and make it more appealing for families to come for an evening meal."

The development is the final piece in the jigsaw of completing the revamp of the city centre, with Queen Street having been updated a year ago and Cardiff Bay having seen a lot of regeneration. St David's 2 has also been a catalyst for Cardiff International Sports Village near the bay.

The first set of lettings after John Lewis are set to be announced some time in the New Year. Letting agents for the scheme are Lunson Mitchenall, Cushman & Wakefield and EJ Hales.

Meanwhile in Newport, Modus Corovest (Newport) is leading a £200m facelift of the city centre with the development of Friars Walk mixed-use development, which includes 450,000 sq ft of retail, including a 105,000-sq ft Debenhams, a multiplex cinema, a new restaurant quarter, a city hotel, 250 new apartments and a new bus station. Modus has confirmed that M&S will anchor the scheme's northern end, trading from 55,000 sq ft, and New Look is taking 30,000 sq ft.

Nigel Poad, leasing director for Modus, says: "We have a number of other deals in solicitors' hands with major fashion operators, which will strengthen the overall retail offer."

Construction is due to start in 2008 and completion is anticipated for 2010. Lunson Mitchenall and Tushingham Moore are agents for the scheme.

Beth Struthers, surveyor in the retail and leisure agency department of Atisreal, says: "Newport is now a city in its own right. New developments by Modus and a Debenhams are planned. But, as a customer, will this happen fast enough? Limited parking and heavy congestion makes shopping hard in Newport. At the same time, Cardiff is increasing in strength just as quickly with St David's 2 and the first John Lewis department store in Wales. This will surely enable it to remain at the centre of Welsh retail."

Mermaid in the swim

At Mermaid Quay, Cardiff Bay, three new restaurant lettings have been announced.

Strada, Café Rouge and GARÇON! - an upmarket, locally owned French Bistro - have all taken units at the waterfront scheme, which already boasts more than 20 restaurants, cafés and bars and was developed by Sovereign Land and Schroder Exempt Property Unit Trust.

Café Rouge property director Phil Derbyshire says: "The opening of the Wales Millennium Centre next door, the growth of the area as a 'must visit' location for tourists and day trippers, plus all the new offices and apartments that have been, and are still being, built, have all completely transformed the atmosphere on the waterfront into a buzzy, family-friendly destination."

In the last five years, top rents have moved from £25 psf to almost £40 psf but remain extremely competitive in respect of other comparative locations around the UK.

The letting agents for Mermaid Quay are Reid Rose Gregory, King Sturge and Philip Hughes Davies.

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