Development activity hits new low
Published: 04 April, 2011
Shopping centre development in the UK saw its slowest year since the mid-1990s in 2010, according to Cushman & Wakefield
Five new schemes and six extensions opened in 2010, adding just over 227,000 sq m of new shopping centre space. This represents a marginal decline on 2009’s development total of around 235,000 sq m. Extensions and redevelopments to existing schemes accounted for 45 per cent of total new space.
In its UK Shopping Centre Development report, the real estate adviser warns that development is expected to continue at a restrained pace in 2011, with a sharp slowdown in activity predicted for 2012.
Just over 260,000 sq m of new shopping centre space is scheduled to open in 2011. While this represents a 15 per cent increase on the 2010 level, the pipeline figure is skewed by the 176,500-sq m Stratford City scheme in London, where construction began prior to the economic downturn.
Only 53,000 sq m of new space is scheduled for completion in 2012. However, reliable forecasts for more than 12 months into the future are difficult as many developers do not comment on the status of their projects. With the exception of Land Securities’ Trinity Leeds, due in 2013, and the Tesco centre in West Bromwich, scheduled for next year, no major projects have begun construction in recent months.
As of January 2011, total shopping centre provision in the UK stands at nearly 16.2 million sq m across 695 schemes. Gross Lettable Area per 1,000 of the population stands at 260.6 sq m, up slightly from 258.7 sq m in January 2010 – well above the EU-27 average of 235.4 sq m.
Toby Sykes, partner in Cushman & Wakefield’s retail services team, said: “There is great potential in the current retail development market. The lack of supply of new retail space, coupled with strong demand from leading retailers, is a real opportunity for landlords. They must however, build to requirements and avoid oversupply. From our experience leasing Trinity Leeds for Land Securities at present, it is clear to us that there is considerable demand for the right development product.”
