Development pipeline dries up
Published: 13 October, 2010
The number of new shopping centres being completed in the UK this year is likely to fall by around 40 per cent below the 10-year annual average, according to new research from Cushman & Wakefield.
Just 80,000 sq m of shopping centre GLA was added to the market in the first half of 2010 and completion levels are not likely to pick up before late 2012/early 2013.
Approximately 135,000 sq m and 260,000 sq m is due for completion in the second half of 2010 and 2011 respectively.
The most pipeline development activity is taking place in Greater London with Stratford City, One New Change in the City and Central Square in Wembley currently under construction.
Toby Sykes, retail services partner at Cushman & Wakefield, said: “The pre-letting threshold we have achieved on the Trinity Leeds scheme for Land Securities shows that there is still strong retailer demand for prime new retail and leisure developments in UK towns and cities which are carefully designed with specific retailer requirements in mind.”
Darren Yates, associate in Cushman & Wakefield’s European Research Group, said: “Development activity is expected to remain subdued in the short term. However, some of the large developers are considering restarting projects which were put on hold. Much will depend on the economic outlook which remains uncertain.
“A gradual reduction in availability over the next 12 months should support rental levels and modest rental growth as retailers compete for an ever-diminishing pipeline, but secondary/weaker schemes may see further rental falls.”
