RETAIL DEMAND HANDFORTH DEAN HANDFORTH CHESHIRE - Programme Officers

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HANDFORTH DEAN
                      HANDFORTH
                       CHESHIRE

                               RETAIL
                               DEMAND

                       PROOF OF EVIDENCE
                                        BY

                           M PUDNEY BSc (Hons) FRICS

                           PUDNEY SHUTTLEWORTH

                             31 PARK SQUARE WEST

                                  LEEDS LS1 2PF

     PINS REFS: APP/R0660/V/17/3179605, 31796709, 3179610 AND
                     APP/R0660/W/16/3155191

                                19 DECEMBER 2017

Pudney Shuttleworth Limited. Registered in England and Wales. Company Number: 5001157
                          31 Park Square West, Leeds, LS1 2PF
               Tel: 0113 2031130           www.pudneyshuttleworth.co.uk
Contents

1.0   Qualifications ..................................................................................................................................... 3
2.0   The Appointment ................................................................................................................................ 6
3.0   Handforth Dean and the Immediate Locality........................................................................................ 9
4.0   The Proposals ................................................................................................................................... 13
5.0   Stockport & Macclesfield .................................................................................................................. 25
6.0   Retailer Demand ............................................................................................................................... 38
7.0   Summary and Conclusion ................................................................................................................. 46
8.0   Declaration ....................................................................................................................................... 49

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Appendices

MP1   PLAN SHOWING THE PROPOSED CPG SCHEME, HANDFORTH
      DEAN (NJL PLAN 4)

MP2   PLAN SHOWING THE PROPOSED ORBIT SCHEME, HANDFORTH
      DEAN (NJL PLAN 3)

MP3   NEXT, HANDFORTH DEAN INVESTMENT PARTICULARS

MP4   EXAMPLE SHOPPING PARK TENANT LINE UPS AND LAYOUT
      PLANS
      4.1a and 4.1b – Manchester Fort Shopping Park, Manchester
      4.2a and 4.2b – Birstall Shopping Park, Leeds
      4.3a and 4.3b – Broughton Shopping Park, Chester
      4.4a and 4.4b – Silverlink Shopping Park, North Shields
      4.5a and 4.5b – Arnison Shopping Park, Durham
      4.6a and 4.6b – New Mersey Shopping Park, Speke, Liverpool
      4.7a and 4.7b – Middlebrook Retail and Leisure Park, Horwich, Bolton

MP5   RUSHDEN LAKES TENANT LINE UP AND LAYOUT

MP6   EXAMPLE BULKY/DISCOUNT RETAIL PARKS AND PLANS
      6.1a and 6.1b – Dragonville Retail Park, Durham
      6.2 – Parkway Central Retail Park, Sheffield
      6.3a and 6.3b – St Andrew’s Retail Park, Hull
      6.4 Huddersfield Retail Park, Hull
      6.5 Kingsway Retail Park, Rochdale
      6.6 Brookway Retail Park, Wythenshawe
      6.7a and 6.7b – Hylton Riverside Retail Park, Sunderland
      6.8a and 6.8b – Lancaster City Retail Park, Morecambe
      6.9 Darlington Retail Park, Darlington
      6.10a and 6.10b – Danum Retail Park, Doncaster
      6.11a and 6.11b – Keighley Retail Park, Keighley

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MP7    PEEL CENTRE, STOCKPORT – TOYS R’ US RECONFIGURATION
       PLAN

MP8    NATIONAL GRID SITE, STOCKPORT – LAYOUT OPTIONS

MP9    MERSEYWAY SHOPPING CENTRE, STOCKPORT – LAYOUT

MP10   GROSVENOR SHOPPING CENTRE, MACCLESFIELD – LAYOUT
       PLAN

MP11   RETAILER DEMAND ANALYSIS

MP12   ESKMUIR LETTER OF REPRESENTATION

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1.0    Qualifications

1.1   My name is Michael Pudney and I hold a degree of Bachelor of Science (Hons) in Urban
      Estate Surveying.

1.2   I am a Fellow of the Royal Institution of Chartered Surveyors and I am a Director of
      Pudney Shuttleworth, a firm of Chartered Surveyors specialising in the retail and leisure
      sectors of the commercial property market.

1.3   I have over 35 years’ experience in the commercial property market with particular
      emphasis on the retail warehouse and leisure property sectors. During this time, I spent
      over 16 years with St Quintin, Chartered Surveyors where I was a Partner and Head of
      the Retail & Leisure Department. Prior to setting up Pudney Shuttleworth over 13 years
      ago, I spent over 5 years with DTZ Debenham Tie Leung in their Leeds office, where I
      was a Director, Head of Retail & Leisure for the Northern Region and UK Head of
      Retail Warehousing.

1.4   I have acted on behalf of many retailers, developers and landlords throughout the whole
      of the UK with particular emphasis on the North East and North West of England.

1.5   Amongst my clients, I have at some stage acted in a retained capacity on behalf of the
      following retailers:

            i.   Miller Brothers (Electrical) Limited – Whilst at St Quintin, DTZ and Pudney
                 Shuttleworth, I acted for over 20 years for Miller Brothers (Electrical) Ltd
                 in a retained capacity, in the acquisition of out of town retail warehouse units
                 throughout the United Kingdom. During that time, I acquired over 30 retail
                 units and also undertook their disposals, asset management and all their
                 professional work, including rent reviews, lease renewals and sale &
                 leasebacks.

           ii.   Magnet Group - Whilst at DTZ Debenham Tie Yeung, I acted as National
                 Coordinator and advisor to Magnet Group, (the multiple kitchens retailer),
                 on the whole of their UK portfolio of 250 stores. This involved agency

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and asset management of their entire portfolio, made up largely of retail
                  warehouse units.

           iii.   John Peters Furnishings – Whilst at St Quintin, DTZ and Pudney
                  Shuttleworth, I acted in a retained capacity for John Peters (Furnishings)
                  Ltd for more than 20 years, in the acquisition of all their retail warehouse
                  units throughout the northern region. I also undertook all their disposal and
                  asset management as well as professional work, including rent reviews,
                  lease renewals and sale & leasebacks.

           iv.    Empire Direct/Power EC – Whilst at Pudney Shuttleworth I acted in a
                  retained capacity for Empire Direct (more latterly Power EC), a multiple
                  electrical retailer, in all their property matters, including acquisitions,
                  disposals, rent reviews and lease renewals throughout the UK.

            v.    Brantano (UK) Ltd – I was instructed by national out of town footwear
                  retailer, Brantano (UK) Ltd to dispose of their surplus retail stores on retail
                  warehouse parks throughout the whole of the UK.

           vi.    Topps Tiles – I am currently retained by national tile retailer, Topps Tiles,
                  to acquire retail warehouse units across the whole of the northern UK.

1.6   I have also acted on behalf of a number of other major non-food and food retailers in
      an agency and professional capacity, including; B&Q, Asda, Tesco, J D Sports and Pets
      at Home.

1.7   I also act on behalf of landlord clients in the letting and asset management of their retail
      warehouse and leisure parks throughout the UK. Recent retail transactions have
      involved the letting, sales or re-gears (changing lease terms) to Aldi, Sainsbury’s,
      Marks & Spencer Simply Foods, Poundworld, TK Maxx, B & M Stores, Smyths Toys,
      Dreams, Floors 4 You, Iceland, Halfords, Maplin and Quality Save. Recent leisure
      transactions have involved transactions with Lifestyle Health & Fitness, Mitchells &
      Butlers (Harvester public house), Nando’s, JD Gyms, The Gym Group, Frankie &
      Benny’s and Chiquito’s restaurants.

                                                                                                 4
1.8   I also act on behalf of developer clients seeking to develop retail and/or leisure parks,
      mostly throughout the northern region of the UK. This has involved me speaking to the
      food and non-food retail and leisure operators on a daily basis.

1.9   I am an active member of Accessible Retail (AR), an organisation set up to build a
      working relationship with Parliament and Government, and to increase awareness of
      the economic, competitive and social benefits, which the retail warehouse and leisure
      sectors provide. Consisting of retail and leisure operators, developers, landlords and
      advisors, the total membership of AR is around 1,400 industry professionals.

                                                                                             5
2.0    The Appointment

2.1   I have been appointed by Peel Land and Property Investments plc to provide
      retail market evidence for two proposed retail schemes at Handforth Dean,
      Cheshire and how they may function on an individual and cumulative basis in
      retail market terms.

2.2   At the same time I have been asked to assess the likely level of retailer demand for these
      proposed schemes and the consequent likely impact on retail demand for nearby town
      centres.

2.3   In order to undertake this, I have firstly considered the nature of the proposed
      retail schemes; then considered comparable scale schemes. I have then undertaken
      market research into current retailer demand for these schemes, Stockport and
      Macclesfield and assessed the degree of overlap.

2.4   This then has allowed me to consider the degree of risk of impact on the retail
      market from the both of these schemes in relation to Stockport and Macclesfield.

The Schemes

2.5   There are two proposed schemes at Handforth Dean. The largest is being promoted by
      CPG and is for around 15,315 sq m (circa 165,000 sq ft) of ground floor       retail   and
      restaurant space, with additional significant floor space for mezzanine floors, making
      the total space in the order of 25,350 sq m (273,000 sq ft). This scheme is split across
      three separate planning applications, all of   which have been ‘called in’ and are being
      considered at this co-joined Inquiry (under references APP/R0660/V/17/3179609,
      APP/R0660/V/17/3179605 and APP/R0660/V/17/3179610). I have attached the CPG
      layout at MP1.

2.6   The proposed scheme being promoted by Orbit is for around 6,035 sq m (circa 65,000
      sq ft) of ground floor retail and restaurant space, with no additional floor space at
      mezzanine floor level. This scheme is the subject of a single application/appeal
      (considered at this Inquiry under reference APP/R0660/W/16/3155191). I have attached
      the proposed layout at MP2.

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2.7    This means that the two proposed schemes combined will (if consented) provide some
       21,350 sq m (230,000 sq ft) of ground floor retail space (31,385 sq m / 337,825 sq ft if
       mezzanine floors are included). This is in addition to the already trading and established
       retail provision on the adjacent site at Handforth Dean, where you find Marks &
       Spencer, Tesco Extra, Outfit, Boots and Next Home & Garden, which provide around
       35,992 sq m (387,500 sq ft) of retail space in total.

2.8    This means that the two proposed schemes would result in this location providing in
       total, around 67,300 sq m (724,500 sq ft) of essentially co-located retail space, which
       is a scale of sub-regional significance. To put this in context I have analysed similar
       schemes and their sizes further in this Proof.

2.9    Furthermore, Handforth Dean is located almost adjacent to Stanley Green Retail Park
       (comprising around 10,994 sq m / 118,500 sq ft) of retail warehouse space and it is also
       around 5 minutes’ drive time from a John Lewis department store (9,703 sq m / 104,500
       sq ft) and a Sainsbury’s food store (6,944 sq m / 75,000 sq ft) in an out of town location
       at nearby Cheadle Royal.

2.10   If the CPG and Orbit sites at Handforth Dean were to proceed, this would mean that
       this 3 mile length of the A34 would end up providing around 94,941 sq m / 1,022,000
       sq ft of retail space, and making it a regional shopping destination, linked by short car
       journeys. For comparison purposes, again I have considered various comparable
       shopping parks and their scale later in this Proof.

2.11   The Handforth Dean area already has noticeable overlapping catchment areas with
       nearby Stockport and Macclesfield. This is evidenced through the analysis in Mr Lee’s
       Proof (Section 5 / NJL PLANS 5-8).

2.12   The extent of overlap will increase significantly when the SEMMMS A6 MARR opens
       in Spring 2018. Again, this is addressed within Mr Lee’s Proof (Section 5 / NJL PLAN
       8).

2.13   I therefore intend to comment on the likely impact that the CPG and Orbit schemes
       could have on the existing and proposed retail provision in these nearby centres taking
       account of recent developments, committed schemes and the occupier profile of each
       centre.

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2.14   In the first instance, I have provided background context to the evolution of the
       Handforth Dean area; a more detailed analysis of the proposed CPG and Orbit schemes,
       and contextual analysis of shopping park provision elsewhere. This is covered in the
       next section.

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3.0    Handforth Dean and the Immediate Locality

3.1   Before turning my attention to the details of the proposed CPG and Orbit schemes at
      Handforth Dean, I believe it is worth commenting on the existing retail provision in the
      vicinity (NJL PLAN 1).

Evolution of the existing retail provision at Handforth Dean/Stanley
Green/Cheadle Royal

Handforth Dean

3.2   Taking advantage of the A34 Wilmslow by-pass, being only 5 miles from the major
      conurbation of Stockport and within easy reach of the wealthy residential areas of
      Cheadle Hulme, Alderley Edge, Bramhall, Wilmslow and Macclesfield, it was not
      surprising that when a 40-acre site at Handforth Dean was developed in 1995 for a
      major out of town retail scheme, it was a success.

3.3   Early occupiers to the site were Marks & Spencer and Tesco, with Marks & Spencer
      opening one of their largest flagship stores in the UK, (now totalling some 13,300 sq m
      / 143,000 sq ft). Tesco on the other hand soon realised that their store was undersized
      and in 2007 added a second floor, making their store around 6,500 sq m / 70,000 sq ft.

3.4   Soon afterwards, an additional retail unit (totalling some 3,250 sq m / 35,000 sq ft) was
      built. Adverse economic circumstances led to company casualties with firstly Allders
      ceasing trading, followed by their replacement, BHS, leading to the unit being modified
      through sub-division. It is now let to Boots and The Outfit.

3.5   Since then, there has been another addition to Handforth Dean. Next, who until recently
      had been trading from the nearby Stanley Green Retail Park, relocated in 2016 into a
      new 6,672 sq m / 71,819 sq ft store at Handforth Dean (of which 2,492 sq m / 26,846
      sq ft is at ground floor trading level and 2,158 sq m / 23,229 sq ft is at first floor trading
      level), to trade under their new brand of Next Home & Garden, with the sale of fashion,
      furniture, homewares and garden products. This was developed as part of the wider
      CPG proposal but undertaken early as Next had earlier secured a planning consent on
      the site but without land control.

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3.6    The garden centre area is now part of the proposals by CPG for an extension to provide
       a retail unit totalling 1,160 sq.m (12,500 sq.ft) of ground floor space with the same at
       mezzanine floor (1,160 sq m / 12,500 sq ft), which is also the subject of this Inquiry.

3.7    With a tenant line up as strong as this: I believe that Handforth Dean is now recognised
       as a major out of centre shopping destination by retailers, providing in total around
       29,700 sq m / 320,000 sq ft of retail space. I refer back to my comments regarding the
       scale, location and occupiers of the area in section 2 to justify my position.

3.8    In addition, when the Next unit was marketed as a retail investment, (see MP3 for a
       copy of the particulars), it was seen as having regional scale significance and noted the
       very same level of retail provision that I have set out in my section 2.

Stanley Green Retail Park

3.9    Positioned 2-3 minutes’ drive from Handforth Dean and on a major junction of the A34
       and A555, Stanley Green Retail Park also serves the same catchment population as
       Handforth Dean.

3.10   Opened in 1991, it originally catered for the bulky goods retail market, with early retail
       occupiers including B & Q (DIY), Comet (Electrical), Miller Brothers (Electrical) and
       Halfords (car accessories). Since then, and partly as a result of company casualties (e.g.
       Comet and Miller Brothers), the retail park has changed. Some of the bulky goods
       retailers have been replaced with more aspiring retailers such as TK Maxx (fashion),
       Homesense (furnishings and home goods), Costa Coffee (coffee) and Furniture Village
       (furniture).

3.11   Benefitting from an Open A1 Non-Food retail planning permission, there is every
       chance that this retail park will attract more interest from the less bulkier goods retailers
       as and when space becomes available. This is because such retailers will be able to pay
       higher rents than the bulkier operators. Hence, when there is a lease break arising, the
       landlord will seek new letting opportunities at that time. The landlord in this case would
       be unencumbered by any planning constraints regarding goods.

3.12   The lease break dates at Stanley Green Retail Park are not until March 2022 (TK Maxx)
       and July 2025 (Homesense) but the more important date relates to the B&Q lease expiry

                                                                                                 10
in October 2022. There is a real prospect of B & Q closing their store in the future and
       relocating to a less expensive location or relying on an existing unit elsewhere in the
       locality, thereby freeing up around 4,100 sq m / 44,000 sq ft of space on the retail park.
       Examples within the northern region where this has happened recently include:

              Station Road, Ellesmere Port – now B & M (April 2017);

              Teesbay Retail Park, Hartlepool – now B & M (April 2017);

              Holyoake Avenue, Blackpool – now Poundstretcher & Pet Hut (February 2017);

              Station Road, South Shields – now Home Bargains (September 2017).

3.13   The most likely scenario would therefore be for more traditional town centre type
       retailers (fashion/sports etc) to take up this space.

3.14   Totalling around 10,994 sq m / 118,000 sq ft, this retail park provides an additional
       retail attraction in the Handforth Dean area. Given the complementary nature of the
       occupiers in both locations, I would fully expect shoppers to use both locations either
       on solo trips or on linked trips, not in a competing manner on an “either-or” basis.

John Lewis & Sainsbury’s, Wilmslow Road, Cheadle Royal

3.15   Developed around the same time as Marks & Spencer and Tesco at Handforth Dean,
       this major out of town retail scheme (John Lewis and Sainsbury’s) was developed to
       serve and attract a much wider catchment population that would also incorporate both
       Handforth Dean and Stanley Green Retail Park and beyond.

3.16   Located immediately off the A34 at Cheadle Royal, with easy access to the A555 and
       other trunk roads, this out of town retail development is easily reached by car from
       Stockport and the affluent suburbs of south Manchester, such as Hale, Altrincham,
       Bramhall, Cheadle, and then beyond to Wilmslow, Poynton, and Macclesfield.

3.17   Developed as a John Lewis department store of 18,600 sq m (200,000 sq ft) and a 6,800
       sq m /73,400 sq ft Sainsbury’s food store, it provides a major retail destination for all
       shopping needs, both food and non-food.

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3.18   Whilst there would be some element of competition between the dual location of John
       Lewis/Sainsbury and M&S/Tesco, it is my view that there is also some degree of
       complementarity particularly regarding John Lewis and M&S.

3.19   Based on the existing retail provision at Handforth Dean, Stanley Green Retail Park and
       the John Lewis and Sainsbury’s, there is a current retail provision of around 63,500 sq
       m / 683,500 sq ft, made up of major named retailers including; Marks & Spencer, Next,
       John Lewis, Tesco, Sainsbury’s, The Outfit, Boots, TK Maxx , Homesense, Furniture
       Village and B & Q.

3.20   With this amount of existing retail provision in and around this area of south
       Manchester, and with a wide catchment area, including the nearby towns of Stockport
       and Macclesfield, as demonstrated in Mr Lee’s Proof (Section 5 and NJL PLAN 1), I
       would expect in retail market terms that there would be a very strong attraction to this
       location by shoppers to any wider retail proposition. Hence, there would be a
       commensurate strong demand from retailers to locate here. I assess this further below.

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4.0    The Proposals

4.1   I will be addressing Stockport and Macclesfield later in my Proof. However, to
      understand the likely competition for retail occupier demand, I need to go into
      detail about the two proposed retail schemes at Handforth Dean, being promoted by
      CPG and Orbit.

CPG site proposal

4.2   The site of the CPG scheme is located immediately adjacent to the A34 trunk
      road. Positioned adjacent to Next Home & Garden, it is designed as a natural
      extension to the current retail provision at Handforth Dean, I have included the
      proposed layout plan at MP1 (NJL PLAN 4).

4.3   Totalling some 25,350 sq m (275,000 sq ft) of retail and restaurant floor space
      (including mezzanine floors), it is intended to create 14 retail units in unit sizes
      between 850 sq m (9,150 sq ft) and 5,644 sq m (60,750 sq ft), three drive thru’
      restaurants (in unit sizes between 198 sq m (2,130 sq ft) and 541 sq m (5,823 sq ft) and
      four stand-alone restaurants (in unit sizes ranging from 199 sq m (2,142 sq ft) to 394 sq
      m (4,240 sq ft). The proposals in planning terms bring forward         siting and layout as
      detailed matters, but are proposed to be open A1 non-food retail       with    no   goods
      restrictions, no sub-division restrictions, no minimum sizing and no mezzanine
      restrictions.

4.4   Given the nature of the proposed scheme (in terms of layout, unit sizes, number       of
      proposed food outlets and restaurants etc) and its position adjacent to the existing retail
      provision at Handforth Dean, I would expect the CPG scheme to be targeting retailers
      normally associated with a ‘shopping park’.

4.5   This means that the type of retailer targeted to occupy space on this park would in the
      main be, branded, national multiples, often seen in shopping centres, high streets and
      major retail warehouse parks. The retail uses would include fashion (clothing and
      footwear), variety stores, department stores, sports goods and sports fashion, toiletries
      and cosmetics, outdoor/leisure clothing and equipment, toys and games, hobbies,
      children’s wear and accessories and gifts. In some cases they can attract quality

                                                                                              13
furniture and furnishings retailers, also associated   with the more traditional retail
       warehouse park.

4.6    Where shopping parks vary from the more traditional retail warehouse parks is
       generally the size and position of the park, the tenant line up and the level of
       rents paid.

4.7    Shopping parks tend to be located adjacent to a motorway or a major road network so
       as to attract shoppers from a wide, high car ownership catchment       area. Being larger
       in overall size than a traditional retail warehouse park, they provide a large number of
       individual units in varying sizes (from as small as    140 sq m (1,500 sq ft) to more
       than 5,574 sq m (60,000sq ft). Such units are typically tenanted by branded multiple
       retailers (often associated with the high street and shopping centres) and commanding
       a significantly higher rental.

4.8    Typically, a northern based shopping park can range in overall size from around
       13,900 sq m to 46,450 sq m (150,000 sq ft to 500,000 sq ft) with rents ranging
       from around £2.80 per sq m to £6.00 per sq m (£30.00 per ft to £65.00 per sq ft).

4.9    Landlords for shopping parks will generally seek to achieve a tenant mix which
       provides variety, from tenants who can afford to pay comparatively higher rents       and
       service charges than the traditional retail warehouse park. In return, the retail occupiers
       will expect to generate higher turnover levels from the large footfall generated from
       being on a much larger, dominant retail park.

4.10   Whilst drive thru’ and stand-alone restaurants are common on both retail and
       shopping parks, they would undoubtedly be attracted here, by the size of the
       scheme, expected tenant line-up (branded multiple retailers), the ease of access
       from the A34 and wider network and the existing retail provision at Handforth
       Dean.      The restaurants will offer additional interest to a scheme and increase
       dwell times on the park and thereby seek to increase expenditure in the retail
       units on each visit, In preference to competing retail locations, including town
       centres.

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Example Shopping Park Locations and Tenant Line Ups

4.11   Below are a few examples of shopping parks across the northern region. I have
       included at MP4 examples of shopping park tenant line ups and layout plans, with a
       location plan and layout. I would note that most of these are larger than      the     CPG
       proposals, but my analysis above demonstrates that the resultant position with the CPG
       proposals coming forward would be a composite retail provision (adding in Next,
       Tesco, M&S) that is of direct comparison.

4.12   Whilst these are good examples of shopping parks, there is a similarity and
       overlap with retail occupiers on some of the larger retail warehouse parks and
       town centres. I have placed (i) an asterisk against those retailers located at the
       Peel Centre, Stockport; and (ii) underlined those retailers who are present in
       Stockport Town Centre and/or Macclesfield Town Centres as well. This
       demonstrates the significant overlap that occurs between such types of retail
       provision, which could have an adverse effect on the future well-being of the
       Peel Centre and the town centre, for reasons I will outline in detail shortly (an
       issue addressed further by Mr Lee).

            Town/Name          Overall Size      Main Occupiers                    Max
                               (sq m/sq ft)                                        Rent
                                                                                   £/sq m
                                                                                   £/ sq ft
            Manchester –       30,310 sq m       H & M*, Outfit, Next*,            £3.48
            Manchester         (326,250 sq ft)   Game Poundworld, Sports           / sq m
            Fort                                 Direct, Mothercare World,
            Shopping Park                        Boots*, Argos*, New               (£37.50
                                                 Look*, Trespass T K               /sq ft)
                                                 Maxx*, Asda Living, EE
                                                 M & S Simply Foods, O2,
                                                 Superdrug, Nike, Clarks,
                                                 Thomas Cook, Specsavers,
                                                 Card Factory, Thomson
                                                 Travel, Costa Coffee,

                                                                                               15
Carphone Warehouse,
                                    Claire’s Accessories
                                    (plus, restaurants)
Leeds –           19,305 sq m       Boots*, River Island,         £6.04
Birstall          (207,808 sq ft)   Wilko*, Argos*, M & S         / sq m
Shopping                            Simply Foods,
Park                                Burton/Dorothy Perkins/       (£65.00
                                    Evans, Mamas & Papas,         /sq ft)
                                    Next*, T K Maxx*, DFS*,
                                    Wren Living, Toys R Us*,
                                    W H Smith, Carphone
                                    Warehouse, Thomson
                                    Travel (plus, restaurants
                                    nearby)
Chester –         32,516 sq m       Tesco Extra, Sports Direct,   £4.65
Broughton         (350,500 sq ft)   Monsoon, River Island,        / sq m
Shopping Park                       New Look*, Next*,
                                    Primark, Homesense, Asda      (£50.00
                                    Living, Outfit, M & S         /sq ft)
                                    Simply Foods, Toys R Us*,
                                    JD Sports, Nike
                                    W H Smith, Boots*, Clarks,
                                    Poundworld, Clinton Cards,
                                    Claire’s Accessories, O2,
                                    Card Factory, Spec Savers,
                                    Body Shop, EE, Thomson’s
                                    Travel, Costa Coffee,
                                    (plus, restaurants)
North Shields –   20,217 sq m       M & S Simply Foods,           £4.74
Silverlink        (217,610 sq ft)   Boots* H & M*, Outfit,        / sq m
Shopping                            Wilko*, ScS*, Mothercare,
Park                                Argos*, Sports Direct, New    (£51.00
                                    Look*, River Island, J D      /sq ft)

                                                                            16
Sports, Halfords, Currys/PC
                                   World*, Harveys,
                                   Poundworld
                                   (plus, restaurants)
Durham –         31,122 sq m       Sainsbury’s, Laura Ashley,    £3.21
Arnison          (335,000 sq ft)   Asda Living, Smyths Toys      / sq m
Shopping                           Marks & Spencer, Boots*,
Park                               New Look*, Outfit, Wilko*,    (£34.50
                                   River Island, Next*, Nike,    /sq ft)
                                   Superdrug, Lakeland,
                                   Mountain Warehouse, Pets
                                   At Home, EE, Card Factory,
                                   Maplin, The Works, Costa
                                   Coffee (plus, restaurants)
Liverpool –      44,897 sq m       Currys/PC World*, B & Q,      £5.11 /
New Mersey       (483,268 sq ft)   River Island, New Look*,      sq m
Shopping Park,                     Sports Direct, Marks &
Speke                              Spencer, Next*, JD Sports,    £55.00
                                   WH Smith, H & M*,             / sq ft
                                   Boots*, Sofology, Argos*,
                                   ScS*,Marks & Spencer
                                   Simply Foods, DFS*,
                                   Clarks, Harveys/Bensons*,
                                   Mamas & Papas, Smyths
                                   Toys, Outfit, Oak
                                   Furnitureland, Pets at
                                   Home, Thomson
                                   Travel, Halfords,
Bolton –         52,659 sq m       Next*, Marks & Spencer,       £4.54 /
Middlebrook      (566,818 sq       Currys/PC World*,             sq m
Retail &         ft) excluding     Sofology, Oak
Leisure Park,    7,418 sq m        Furnitureland, Dreams,        £48.82
Horwich          (79,843 sq ft)    Furniture Village, DFS*,      / sq ft

                                                                           17
of cinema and     Wilko*, Smyths Toys, Pets
                               10 pin            at Home, ScS*, TK Maxx*,
                               bowling           Harveys/Bensons*, JD
                                                 Sports, Sports Direct,
                                                 Argos*, River Island,
                                                 Poundland, Laura Ashley,
                                                 Halfords, Dreams, EE,
                                                 Costa
                                                 Coffee, Boots*,
                                                 Carphone Warehouse,
                                                 Thomson Travel, Sports
                                                 Direct, Poundworld,
                                                 Specsavers, JD Sports,
                                                 Poundland, O2, Clarks

4.13   A very recent example of a shopping park in another area of the UK, is Rushden
       Lakes Shopping Park at Rushden near Northampton. Totalling around 35,300 sq m
       (380,000 sq ft). It opened in 2017 attracting many branded multiple retailers to a variety
       of unit sizes ranging from as small as 140 sq m (1,500 sq     ft) to 3,995 sq m (43,000
       sq ft).

4.14   I have appended at MP5 a layout of Rushden Lakes. Below is a brief overview of
       Rushden Lakes Shopping Park. I have placed an asterisk against those retailers located
       at the Peel Centre, Stockport; and underlined those retailers who are present in
       Stockport Town Centre and/or Macclesfield Town Centres as well.

             Town/Name         Overall Size      Main Occupiers                  Max
                               (sq m/sq ft)                                      Rent
                                                                                 £/sq m
                                                                                 £/ sq ft
             Rushden,          35,300 sq m       House of Fraser, Marks &        £4.18
             Northampton –     (380,000 sq ft)   Spencer, Primark, Boots*,       / sq m
                                                 H & M*, River Island, New

                                                                                              18
Rushden Lakes                        Look*, JD Sports, Next,          (£45.00
            Shopping Park                        Mountain Warehouse,              /sq ft)
                                                 Hobbs, Warehouse, Jigsaw,
                                                 White Stuff, Fat Face,
                                                 Clarks, Paperchase,
                                                 Accessorize, Holland &
                                                 Barratt, Phase Eight, Moss
                                                 Bros (plus, restaurants)

4.15   It also should be noted that there are some cases where rental levels have exceeded
       those set out above, but these are an exception and relate to major regional shopping
       centres, such as Fosse Park, Leicester or Glasgow Fort, Glasgow, where rents around
       £9.29 per sq m (£100 per sq ft) have been achieved.

4.16   Finally, whilst shopping parks are characterised by the high rental levels when
       compared to other types of retail warehouse parks, they are not restricted to only
       high street branded occupiers. They generally offer a wide range of ‘blends’ of
       retailers, which can include some discounters such as Poundworld, Wilko or
       Poundland as well as some medium or high-end retailers, such as Sofology,
       Furniture Village, DFS, Smyths Toys or Currys/PC World.              An anchor store is
       also important and this can be a traditional type department store, such as House of
       Fraser or Debenhams, but it can also be the likes of Primark and Marks and
       Spencer.

Orbit site proposal

4.17   The site earmarked for the Orbit scheme is located to the rear of the proposed
       CPG scheme. It is also designed to be a continuation of the existing Handforth Dean
       shopping provision and positioned adjacent to the Next unit.

4.18   Totalling around 6,035 sq m (64,960 sq ft) of ground floor space, it is to be
       arranged in 5 retail units (in unit sizes from 744 sq m (8,000 sq ft) to 2,240 sq m (24,111
       sq ft) together with 2 smaller units (of between 114 sq m (1,227 sq ft) and 315 sq m

                                                                                               19
(3,391 sq ft) with uses envisaged as small retail. restaurant or fast food takeaway. I have
       included the layout at MP2.

4.19   Three of the five larger retail units are proposed as being 744 sq m (8,000 sq ft)     and
       Orbit are seeking an Open A1 non-food retail use on all the proposed retail
       units and no mezzanine floors are proposed.

4.20   Given the nature of the scheme, in terms of layout, unit sizes, position of the
       scheme, lack of mezzanine floors and size of restaurants/food takeaway units, this
       would appear to be a scheme for a different market to the CPG scheme.

4.21   However, if I consider the Orbit scheme on a solus basis first, and assume CPG
       does not happen, then I would expect that Orbit would have a wider range of
       possible tenants to consider. Notwithstanding this, I would expect this scheme to be
       less “premium” if built on its own. It would rely significantly on the Next / M&S /
       Tesco attraction nearby; would have a less prominent location and hence         a     lower
       rental proposition.

4.22   This would also make sense, given the relatively small size of scheme, and the
       secondary location with no direct access or visibility from the A34.

4.23   Partially dictated by the intended lack of food retail use and not proposing mezzanine
       floors, I would envisage this scheme to be targeted towards the more rent sensitive,
       bulkier goods and/or discount retail occupier.

4.24   Typically, a discount retail park is anchored by a discount food store (Aldi or
       Lidl) and/or a discount variety store (B & M, Home Bargains etc), and would
       expect to attract other national discount retailers involved in the sale of discount
       clothing, footwear, sports goods, furniture etc along with eat-in or takeaway fast
       food, sandwiches, coffee outlets.

4.25   A more traditional bulky goods retail park would include uses such as DIY,
       furniture, floor coverings, electrical, motor accessories, pets and pet accessories    and
       soft furnishings. However, with a changing market over the last few years, the more
       open A1 retail parks have attracted attention from some of the discount retailers, so that

                                                                                                20
in some instances both bulky goods retailers and discounters trade from the same
       scheme.

4.26   The rents on these types of schemes would be significantly lower than the rents
       expected on a shopping park, due to the bulky or discount nature of the retailer,
       who would be rent sensitive, have lower sales margins and their customer base
       would be more localised.

4.27   Typically, a northern based out of town bulky and/or discount retail park can
       range in size from around 6,500 sq m to slightly over 13,935 sq m (70,000 sq ft   to
       slightly over 150,000 sq ft) with rents ranging from around £1.11 per sq m to
       £1.86 per sq m (£12.00 per ft to £20.00 per sq ft).

4.28   I have set out a schedule in MP6 of a few examples of discount retail parks and
       bulky retail parks (incorporating discount retailers) across the northern region. The
       tenant line up is provided for each, with layouts provided where these have been
       located.

4.29   I have set out below the tenant line up for each one and placed an asterisk beside
       each tenant that is located at the Peel Centre, Stockport and underlined those tenants
       also found in Stockport or Macclesfield Town Centres.

            Town/Name           Overall Size      Main Occupiers             Rent
                                  (sq m/sq ft)                               £/sq m
                                                                             £/ sq ft
            Durham –            9,290 sq m        Aldi, Matalan*, Iceland,   £1.86
            Dragonville         (100,000 sq ft)   Home Bargains*, Shoe       / sq m
            Retail                                Zone, Poundworld,
            Park                                  T K Maxx*, Card            (£20.00
                                                  Factory, Greggs,           /sq ft)
                                                  Chesney’s Coffee
            Sheffield –         9,783 sq m        Home Bargains*,            £1.49
            Parkway Central     (105,300 sq ft)   Iceland, Matalan*,         / sq m
            Retail Park                           Poundworld, Gala Bingo,
                                                  Subway, Card Factory,      (£16.00

                                                                                          21
Greggs, Burger King        /sq ft)
Hull –            6,830 sq m        Wilko*, Poundland,         £1.11
St Andrews        (73,550 sq ft)    Iceland, Store Twenty      / sq m
Retail                              One, B & M, Select
Park                                Fashion, Card Factory,     (£12.00
                                    Poundstretcher, Jack       /sq ft)
                                    Fulton, Barnado’s
Huddersfield –    9,009 sq m        Aldi, Dunelm Mill*,        £1.77
Huddersfield      (96,977 sq ft)    B & M, Poundstretcher,     / sq m
Retail Park                         Wynsors Shoes,
                                    Matalan*                   (£19.00
                                                               /sq ft)
Rochdale –        8,629 sq m        Asda (small food store),   £1.63
Kingsway Retail   (92,878 sq ft)    The Range, Bargain         / sq m
Park                                Buys, Iceland, Sports
                                    Direct, Pets at Home,      (£17.50
                                    McDonalds                  /sq ft
Wythenshawe –     7,897 sq m        Aldi, B & M, Matalan*,     £1.86
Brookway Retail   (85,000 sq ft)    Pets at Home, Wickes       / sq m
Park
                                                               (£20.00
                                                               /sq ft)
Sunderland –      11,326 sq m       Aldi, Matalan*,            £1.70
Hylton Riverside (121,900 sq ft)    Peacocks, B & M,           / sq m
Retail Park                         Poundworld, Argos*,
                                    Poundstretcher, Pets at    (£18.50
                                    Home                       /sq ft
Morecambe –       10,859 sq m       Dunelm*, Sports Direct,    £1.51
Lancaster City    (116,883 sq ft)   Pets at Home,              / sq m
Retail Park                         Carpetright,
                                    Harveys/Bensons*,          (£16.27
                                    Matalan*, Wickes           /sq ft
Darlington–       14,312 sq m       DFS*, ScS*, Carpetright,   £1.70

                                                                         22
Darlington          (154,056 sq ft)   Home Bargains*,              / sq m
            Retail Park                           Currys/PC World*,
                                                  The Range, Furniture         (£18.50
                                                  Village, Harveys*, Pets      /sq ft
                                                  at
                                                  Home, TK Maxx*,
                                                  Costa*, KFC*
            Doncaster –         13,885 sq m       Currys/PC World*,            £1.78
            Danum Retail        (149,453 sq ft)   Smyths Toys, Harveys/        / sq m
            Park                                  Bensons, Mothercare.
                                                  Power EC Electrical,         (£19.15
                                                  Dreams, Carpetright,         /sq ft
                                                  Sofology, B & M,
                                                  American Golf
            Keighley –          6,238 sq m        Poundstretcher, Halfords, £1.49
            Keighley            (67,150 sq ft)    Pets at Home, TK             / sq m
            Retail Park                           Maxx*,
                                                  Currys/PC World*, The        (£16.00
                                                  Bed Shop, Bensons*,          /sq ft
                                                  Jollyes, Greggs, KFC*

4.30   If the proposed CPG and Orbit schemes were to progress together, neither would
       necessarily conflict directly with each other. They will both compete for some of the
       mid-market tenants, but those more likely to align with the premium end will locate on
       the CPG scheme, and those more likely to align with more discount/ bulky goods will
       locate on the Orbit scheme (all other variables being equal).

4.31   This would thus lead to an even greater concern over the competition for tenants that
       do, or could locate in Stockport (including the Peel Centre) and Macclesfield Town
       Centres. In essence, the combination of both schemes would most likely exhaust most
       of the likely tenant targets of the town centres and/or seek to draw more tenants who
       already exist in each centre, thereby further increasing vacancies in the town centres.

                                                                                             23
4.32   In addition, the critical mass of both schemes would compete even more effectively
       with other existing out of centre locations. Where these schemes then potentially lose
       tenants and don’t have any goods controls (such as Stanley Green) then even more open
       A1 out of centre retail floor space becomes available for tenants to move in to in those
       locations, again with a risk of duplicating tenants who would go to, or are already in,
       existing centres.

4.33   Combined, the two schemes at Handforth Dean would provide a total of some 31,385
       sq m (338,000 sq ft) of retail and restaurant space (including mezzanine floors), which
       when added to the current retail provision in the area, (which currently stands at around
       63,500 sq m / 683,500 sq ft), would result in Handforth Dean and its immediate area
       providing some 94,885 sq m / 1,021,000 sq ft of retail and restaurant space.

4.34   Both schemes will have combined prominence on the main road network with easy
       access to the motorway network. They will have dedicated access points, clear branding
       and signage, and dedicated, surface level free car parking to users. All of this is very
       attractive to potential occupiers, in comparison to existing town centre provision.

4.35   The expected effect of this would be to draw even more people to the area from an even
       wider catchment. This is not reflected in the work done by the appellants in their current
       individual analysis to date. This is covered further by Mr Lee in his Proof of Evidence
       regarding catchment areas and trade draw.

4.36   This wider catchment will be even more obvious and impact will be even greater when
       Manchester Airport Relief Road South opens in Spring 2018, when it will provide a
       quick and easy link to the catchment population situated between the A6 trunk road and
       Manchester Airport/M56 motorway. I have referred already to this matter, (it is covered
       further by Mr Lee in his Proof of Evidence).

4.37   The SEMMMS A6 MARR will result in an even wider catchment, overlapping even
       more with the catchment of Stockport Town Centre and Macclesfield Town Centre
       (NJL PLAN 8), which will mean Handforth Dean will prove even more attractive to
       existing and potential tenants. To further understand the wider retail context regarding
       Stockport and Macclesfield I have set out the various retail schemes /developments of
       note in my next section before analysing retail demand.

                                                                                              24
5.0    Stockport & Macclesfield

Context – Retail Investment

5.1   The two towns of Stockport and Macclesfield have been selected by me as towns most
      worthy of investigation, for the reason that they are both important commercial centres
      relative to the south Manchester area. They are likely to be most affected by the CPG
      and Orbit proposals if they were to proceed. This is due to each of them having
      significant overlapping catchment areas with Handforth Dean (as evidenced by Mr Lee
      in his Proof of Evidence).

5.2   Stockport is only around 6 miles from Handforth Dean and Macclesfield is around 9
      miles away. Both towns have important existing retail provision, including retail
      warehouse parks and town centre shopping centres.

5.3   Retail warehouse parks and shopping centres are assets which require constant
      attention. It is rare that a landlord for a retail park or shopping centre can sit back and
      do nothing, as the asset is at the mercy of market conditions, tenant demand and the
      commercial stability of their occupiers. In addition, the majority of the space is occupied
      by way of occupational leases, where lease lengths vary and rents change over time.

5.4   Increasingly there is a much greater market sensitivity with regards to the dynamics of
      occupying retail floor space. Leases are now much shorter and/or have more break
      options. Retailers are evolving more quickly. New brands emerge and old brands
      disappear more quickly, and there is increasing sensitivity to on-line retailing, with
      some retailers choosing to be on-line only, and others choosing both channels to reach
      their customers.

5.5   When a landlord considers embarking on a major investment so as to improve their
      retail asset, they must first establish occupier demand and whether the expected rents
      and costs incurred would make it viable.

5.6   However, the decision of the landlord to progress or not, is also affected by current or
      potential/anticipated vacancies within their scheme, which can come about as a result
      of an occupier ceasing to trade or the lease coming to an end and the tenant choosing

                                                                                              25
not to renew. In this instance, the landlord is then faced with a potentially declining
       asset value and the need to find new occupiers as soon as possible.

5.7    This scenario occurs in town centres, retail parks and shopping centres up and down
       the country on a regular basis. The landlord’s success in taking forward new investment,
       through letting or re-letting vacant space, will be influenced heavily by the economic
       and market conditions together with retail occupier demand.

5.8    This is now much more sensitive than it ever used to be, for the reasons noted above,
       (shorter lease lengths, break options and fast evolving retailers). Hence, as soon as there
       is uncertainty about whether retailers may wish to occupy, this can completely
       undermine landlord confidence in taking forward new investment. This would of course
       be particularly acute where there is the very real threat of a well located, out of centre
       proposition that would overlap with catchments and tenant profiles, as demonstrated in
       this particular instance with both schemes.

5.9    Occupier demand for a particular retail or shopping centre can change from time to time
       (again a product of the market and the retailer’s internal decision processes). However,
       the more competition there is from other comparable and competing schemes, the less
       likely occupiers will be around to fill the vacant space. In addition, retailers take
       comfort from the existence of other retailers (such as significant anchor tenants) and as
       such their choice of a suitable location is often influenced by the decisions of others.

5.10   Property, by its very nature, is a ‘lumpy’ investment. The term ‘lumpy’ is used here to
       describe a ‘less liquid’ form of asset/investment. The property market is subject to
       many physical or timing restrictions leading to complications and significant time
       delays. These may include complying with the planning processes, finding suitable
       funding, marketing of the asset, dealing with building repairs, renovations and
       improvements, land assembly, ground and environmental issues etc. This often means
       that decisions taken today can take many months or years thereafter to be implemented.
       During this time, both the economic/market conditions and occupier demand may have
       changed.

5.11   With this context in mind, it is important to consider the retail provision in Stockport
       and Macclesfield and explore where future aspirations or threats could be directly
       affected by the CPG and Orbit schemes progressing.

                                                                                               26
Stockport

5.12   Stockport is one of the major towns serving the south Manchester area. Located only
       some 6 miles from Handforth Dean and linked by a network of major roads, these two
       locations have a significant overlap in their catchment areas.

5.13   Stockport has a number of retail warehouse units, arranged as solus sites or as retail
       parks. In addition, Stockport has a town centre, providing high street retail, retail park
       and solus retail warehousing space, shopping centre and leisure amenities.

5.14   I have set out below the main retail destinations in Stockport and, where necessary, I
       have commented on the landlord’s aspirations to improve their assets and how those
       opportunities could be affected by Handforth Dean.

The Peel Centre, Great Portwood Street

5.15   The Peel Centre is owned by Peel Holdings and is located within the defined
       town centre shopping area. The detail of its location and layout is set out in Mr Lee’s
       Proof of Evidence (and NJL PLAN 13).

5.16   Whilst it is a retail warehouse park, the Peel Centre is very much linked with the main
       town    centre shopping area, but in a unique (or at least unusual) sense. It is one of the
       few retail parks of some scale which is directly connected in to a town centre
       location. Indeed, it was built specifically to offer a genuine choice of location for larger
       floor plate /retail warehouse style floor space instead of being in out of centre locations.
       It was a positive attempt by the Council to address the issue of outflow of retail trade
       to out of centre locations.

5.17   Built in 7 separate phases (Phase 1 being built in 1987), The Peel Centre now
       provides 30,865 sq m of space, made up mostly of retail uses with a small proportion
       used for food and beverage (NJL PLAN 13).

5.18   The highest proportion of retail uses are fashion (38.45%) followed by home,
       furniture and electrical (31.04%) with the rest being used for convenience,
       discount, miscellaneous (Boots, Argos, Toys R Us etc) and food and beverage.

                                                                                                27
5.19   Retail occupiers include: Home Bargains, Boots, Hobbycraft, H & M, Argos,
       New Look, GAP, T K Maxx, Next, Wilko, Toys R Us, Matalan, Curry/PC World,
       DFS, Harveys, ScS and Dunelm. Food and beverage occupiers include; Frankie &
       Benny’, KFC and Costa.

5.20   The current position at The Peel Centre appears fairly stable, since with the exception
       of Unit 11 (next to KFC) it is fully occupied. However, behind the scenes the landlord
       is facing a number of threats to their asset, threats from potential store closures
       through company failures and lease expiries.

5.21   The weighted average of future lease expiries across the whole of The Peel
       Centre is only 5.4 years, which has repercussions in terms of how the landlord will
       manage this centre, and the effect on the value of the asset.

5.22   Between now and 2019 some 7,095 sq m (76,365 sq ft) of existing floorspace,
       which is 23% of the whole asset, could became vacant as a result of leases due      to
       expire in this period. These include:

              Argos (Unit 1D) - who occupies 929 sq m (10,000 sq ft) at the Peel Centre, had
               a lease expiry on 4th August 2017. Whilst they have indicated their intention to
               renew their lease, the new lease terms have not as yet been agreed with the
               Landlord and as such Argos are ‘holding over’. This leaves Argos in the position
               that unless suitable terms can be agreed, they could withdraw and vacate their
               unit. Being part of the Sainsbury’s group of companies, there have been many
               recent instances where Argos have not renewed their leases, instead choosing
               to close stores and take smaller units within existing Sainsbury’s food
               stores. There is a Sainsbury’s food store to the North West of The Peel Centre.
               Argos also has a store within the Merseyway Shopping Centre. Whilst this
               uncertainty remains, there is a threat of a vacancy on the park should Argos not
               renew their lease.

              Toys R Us (Unit 6) – who currently trade from 4,075 sq m (43,865 sq ft) has a
               lease expiry in 2018. Their ideal size of store is now 1,158 sq m (20,000 sq ft),
               making their existing store at The Peel Centre, significantly over sized. In
               addition, their US parent company has recently filed for Chapter 11 Bankruptcy
               and on 4th December 2017, Toys R Us UK announced plans to instigate

                                                                                             28
Company Voluntary Arrangement (CVA), whereby the company will seek
              creditor approval to reposition its real estate portfolio and initially seek to close
              at least 26 stores across the UK, deemed to be too big and expensive to run. It
              is expected that the company intends to commence store closures in Spring
              2018.

              With a lease expiry in November 2018 and an oversized unit, it makes the future
              prospects for Toys R Us staying on The Peel Centre (or even in the UK) at best
              questionable. Either way, the future prospect for Toys R Us remaining on The
              Peel Centre (in whole or in part) is very low.

             Next (Unit 4B) – who currently trade from 2,090 sq m (22,500 sq ft) have a
              lease expiry in 2019. As referenced earlier, they also have a new large store at
              Handforth Dean. Whether or not Next decide to renew their lease at The Peel
              Centre is currently uncertain and is of significant concern already to the
              Landlord. With the new store at Handforth Dean, the potential for Next to take
              a view over rationalising its position in Stockport is now heightened and very
              real.

             H & M (Unit 1B) – who currently trade from 1,675 sq m (18,031 sq ft) have a
              lease expiry in 2020. Currently associated with taking space within The
              Grosvenor Centre, Macclesfield and at the same time expressing interest in
              being represented at the new appeal sites at Handforth Dean, there is a very real
              possibility that H & M may not renew their lease and as such lead to a vacancy
              at The Peel Centre.

5.23   If one or more of these retailers decide not to renew their lease, the landlord will
       need to attract another retailer to occupy that space, so with this in mind, the
       landlord has taken the initiative by pursuing two proposals. The first is a potential
       solution to the Toys R Us situation and the other is to enhance the attraction of The
       Peel Centre. Their proposals are as follows:

       Extension and reconfiguration of Unit 6 (Toys R US)

5.24   The landlord has obtained and made a material start on a planning consent to extend
       and subdivide the Toys R Us unit. If they are still trading and are interested in

                                                                                                29
remaining, Toys R Us would have the opportunity to take a downsized unit by way of
       a new lease, and the balance would be subdivided to create a number of smaller units),
       including potentially one for food sales. The details of the proposals are set out at MP7
       which shows the consented layout and unit sizes.

5.25   As an alternative, and (in particular) assuming that Toys R Us decide not to take a new
       lease at all, the landlord has considered the total redevelopment of the Toys R Us unit,
       so as to provide a better layout for the park as a whole and a better fit with potential
       expansion land to the rear, currently owned by National Grid.

5.26   Faced with a potential large vacancy, if Toys R Us do not renew a lease in 2018 (as
       appears likely), the landlord will need occupiers to fill this vacancy. The planning
       consent allows for a range of units to come forward and is remarkably similar in scale
       and format to the Orbit scheme, being only 642 sq m (7,000 sq.ft) less than the Orbit
       scheme in total, with 5 units ranging from 557 sq m (6,000 sq.ft) to 2,323 sq m (25,000
       sq.ft).

       Planned acquisition and development of National Grid land

5.27   National Grid are landowners of a site to the rear of The Peel Centre. This site is surplus
       to National Grid’s operational needs and this has led to Peel making a substantial offer
       to purchase the site, based on a retail development of the site.

5.28   Given the landlocked nature of the site and previous discussions Peel have had with
       National Grid, Peel is best placed to develop the site, but National Grid’s policy is to
       prevent a pre-remediation, off market sale to any party, but they have indicated that the
       offer is at the right level, but they prefer to remediate the site before concluding a deal.

5.29   Peel Holdings see this as a realistic development opportunity within a 5 year timescale.
       Currently National Grid are undertaking their own site remediation programme.

5.30   The acquisition and development of the National Grid land is still within Peel’s business
       plan. They have designed several schemes, which would be both compatible and
       complementary to the existing Peel Centre. At this stage they envisage a scheme size
       of between 6,500 sq m (70,000 sq ft) and 9,290 sq ft (100,000 sq ft) consisting of
       between 4 to 6 units of between 929 sq m (10,000 sq ft) and 2,973 sq m (32,000 sq ft).

                                                                                                30
I have included 1 possible layout option at MP8 that have been drawn up for Peel to
       consider how they could develop the site in the future. These options are not prescriptive
       and can be readily adapted to meet a number of tenant configuration options as required.

5.31   I am informed by Peel Holdings that informal discussions have been held between them
       and Stockport Council. Not only is the Council supportive of the redevelopment and
       expansion proposals for this site, they have indicated that they may be prepared to take
       it forward in their Local Plan process, since the site lies within the town centre shopping
       area.

5.32   This site is regarded as a natural extension to The Peel Centre and once developed will
       provide additional investment and attraction to Stockport Town Centre. Without retail
       occupier interest, Peel would not continue with this planned investment to acquire and
       regenerate the site at an early date. Rather the site could remain undeveloped and in
       need of regeneration for some time to come.

Manchester Road Retail Park

5.33   Manchester Road Retail Park is located in an out of town location, around 1
       mile north of Stockport Town Centre. It is owned by The Brookhouse Group and
       comprises around 8,919 sq m (96,000 sq ft) of retail warehousing with tenants
       being Asda food store, Wickes, Halfords, Poundstretcher and Greggs.

5.34   Currently the retail park is fully let and stable, with recent re-gearing of leases to Wickes
       and Halfords, the current tenant line up is expected to remain the same for the
       foreseeable future and hence would not see any real impact from the Handforth Dean
       proposals in tenant terms.

5.35   In addition, as the scheme has no opportunity to expand its boundary, it is expected
       that it will continue as a retail park serving that part of Stockport in much the same way
       as it has in the past. As a result, I would class this scheme as not being likely to evolve
       or change in the near term as a result of any proposals at Handforth Dean as there
       would not be any tenant changes.

                                                                                                 31
Others

5.36     Many of the other larger retail warehouse units in Stockport are stand-alone out of town,
         solus stores, such Homebase at Bredbury, B & M and Go Outdoors at Cheadle Heath,
         B & Q and Decathlon at Heaton Norris and Carpetright at Hazel Grove. Others are
         small developments, such as Portwood Court (Carphone Warehouse, Maplin and Pizza
         Hut), B & M and Dreams (on Great Portwood Street) and Pets at Home and Office
         Outlet on Didsbury Road.

5.37     Whilst all these stores are open and trading at the moment, it is worth mentioning that
         the Carpetright unit at Macclesfield Road, Hazel Grove is oversized at 2,973 sq m
         (32,000 sq ft) and over 50% of the space is currently available and on the open market.
         The subdivided space is being offered as two separate units (873 sq m / 9,397 sq ft and
         786 sq m / 8,462 sq ft) with Carpetright remaining in the balance. No occupiers are
         currently interested in this vacant space. As above, I don’t envisage any change to
         tenants at these units in the short term from the Handforth Dean proposals.

Stockport Town Centre

5.38     Two significant town centre schemes owned by the Council and serving the
         local population will require the overall vitality of the town centre to continue, if the
         two schemes are to survive in the long term. The two schemes are:

           i.   Merseyway Shopping Centre – An established shopping centre totalling 2,852
                sq m (307,000 sq ft) of retail accommodation, anchored by Primark,
                Debenhams, Boots and Marks and Spencer along with national multiples such
                as Top Shop, JD Sports, New Look and River Island.

                After several years in receivership, the shopping centre was sold to Stockport
                Council in April 2016, with the intention of improving the appearance of the
                centre and upgrading units to cater for retailer’s current needs. So far these
                plans have not been implemented.

                At the moment though, Merseyway Shopping Centre has around 14 vacant shop
                units (including very temporary short term occupancies). I have enclosed a
                layout of the shopping centre at MP9.

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ii.    Redrock – Funded in the main by Stockport Council, this new leisure and retail
               destination has recently opened (Autumn 2017).

               Redrock is positioned on the edge of the prime shopping area, close to
               Merseyway Shopping Centre (Plan contained within MP 9). It comprises a 10
               screen cinema (pre-let to The Light Cinema) along with 10 additional units,
               totalling 3,530 sq m    (38,000 sq ft) and made up of unit sizes from around 232
               sq m (2,500 sq ft) to 1,672 sq m (18,000 sq ft). It is intended to create
               another attraction in Stockport Town Centre and reduce customer leakage to
               other nearby centres.

               Demand for the cinema and restaurant units has been good, with early lettings
               to The Light Cinema, Pizza Express, Zizzi, Mangobean and Gourmet Burger
               Kitchen. However, the proposed 3 retail units suffered from poor retailer
               demand and these have now been let to The Gym Group (for gym use) and
               Loungers (café bar), leaving 3 further restaurant/leisure units remaining vacant.

5.39   It is therefore important that in order for the planned and proposed investments to go
       ahead at The Peel Centre, Merseyway Shopping Centre and Redrock, Stockport remains
       a place to shop and be entertained. It needs to attract much more inward investment
       and much greater retailer interest to further grow as a key town centre.

5.40   My main focus has been on the Peel Centre because there is a stronger
       opportunity to provide larger floor space units and a wider mix of warehouse
       type floor space to meet tenant needs earlier. This does not however detract from the
       importance of the rest of the town centre.

Macclesfield

5.41   Macclesfield is a market town within the county of Cheshire. It lies only around 8 miles
       from Handforth Dean, and therefore has an overlapping catchment area with Handforth
       Dean.

5.42   Being a market town, its main shopping core, grouped around the Grosvenor Centre (a
       town centre covered shopping centre) is of critical importance to its long term future as
       a key retail centre. Lyme Green Retail Park and Silk Retail Park also provide retail
       warehouse floor space.

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