THE DEVELOPMENT STORY - UK SHOPPING CENTRES A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION - The Development Story January 2018
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
UK SHOPPING CENTRES THE DEVELOPMENT STORY A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION JANUARY 2018
1 | UK SHOPPING CENTRES An uncertain consumer backdrop, rising operating costs and the continued growth of e-commerce are to name but a few of the headwinds currently facing the retail sector. The media continues to report on rising vacancy rates, weak retail sales and lower footfall and, although there is no denying that the retail market is undergoing a significant structural change, change can also bring opportunity.
THE DEVELOPMENT STORY: JANUARY 2018 | 2
3 | UK SHOPPING CENTRES
UK SHOPPING CENTRE DEVELOPMENT
10,000 200
9,000 180
8,000 160
7,000 140
Completions (000's sq ft)
6,000 120
Total (million sq ft)
5,000 100
4,000 80
3,000 60
2,000 40
1,000 20
0 0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
H1 2018 (est)
H2 2018 (est)
New Shopping Centre GLA Per Annum (sq ft) Long Term Average (1961) Total GLA (sq ft)
Source: Cushman & Wakefield
In total, 1.3 million sq ft (120,773 sq m) of additional The slightly smaller Lexicon, Bracknell is anchored
shopping centre floorspace was delivered in 2017. by a Fenwick department store, and forms part of
Whilst this remains below the long-term average annual a larger regeneration of Bracknell town centre.
trend rate, and indeed represents a slowdown when
compared to previous years, development activity is Extensions accounted for 52% of new shopping
expected to pick up slightly in 2018, with an estimated centre floorspace delivered during 2017, with many
1.5 million sq ft (139,353 sq m) of shopping centre developments carrying a significant leisure element.
floorspace in the development pipeline. Indeed, an additional 65,000 sq ft (6,039 sq m) of
additional leisure floorspace completed at White
Notable completions in 2017 include Westgate, Oxford Rose Shopping Centre, Leeds in H2 2017, including
(October), and the Lexicon, Bracknell (September). a Cineworld cinema, as well as several branded
The redeveloped Westgate, Oxford is anchored by restaurants. Prior to this, in H1 a retail focused extension
a John Lewis department store and includes a number at The Brewery Quarter, Cheltenham also completed.
of branded retailers and eateries, many of which were
not previously represented in Oxford city centre.
48%
In total,
New shopping centre
developments accounted for
1.3 MILLION SQ FT
of new space in 2017,
whilst extensions represented 52% of additional shopping centre floorspace
was delivered in 2017.
THE DEVELOPMENT STORY: JANUARY 2018 | 4
KEY SCHEMES – 2017
WESTGATE LEXICON
OXFORD BRACKNELL
DEVELOPER
DEVELOPER
The Bracknell Regeneration Partnership
The Westgate Oxford Alliance
(Legal & General Capital and
(Landsec and The Crown Estate)
The Schroder UK Real Estate Fund)
SIZE SIZE
800,000 sq ft (74,322 sq m) 580,000 sq ft (53,883 sq m)
• Anchored by John Lewis • Substantial redevelopment of Bracknell
town centre
• Over 100 new stores, 25 restaurants and cafes,
a Curzon cinema and roof top dining • Anchored by a Fenwick department store
• Leisure offering includes Cineworld, Bill’s,
Opened: October 2017 Carluccio’s, Gourmet Burger Kitchen, Nando’s
and Pizza Express
Opened: September 2017
5 | UK SHOPPING CENTRES
TRENDS
Shopping for experiences Increasing overlap between
Leisure continues to play an important shopping centres & retail parks
role in the retail landscape, with food and beverage
operators accounting for almost 15% of total shopping The out-of-town market has not been immune from
centre take-up in the 12 months to June 2017. Whilst the growth of e-commerce and, as is the case for
the inclusion of restaurants and a cinema has been the shopping centres, consumers now expect an
focus of shopping centre development in recent years, experience when shopping in these locations. This
the type of leisure on offer is evolving as landlords has triggered a diversification in the occupier base,
explore new ways to entice shoppers offline. Examples as a growing number of high street, fast food and
of this include Kidzania, an indoor city for children at restaurant operators occupy big box space. The recent
Westfield London, Junk Yard crazy golf at Westgate, opening of Rushden Lakes exemplifies this trend. The
Oxford and, looking forward, a possible trampoline out-of-town scheme is anchored by a House of Fraser,
park and climbing wall at Festival Place, Basingstoke.
and offers shoppers numerous high street retailers not
previously represented on out-of-town schemes
including Hobbs, Jigsaw, Phase Eight and L’Occitane,
Flexible leasing alongside extensive leisure facilities.
In an age of e-commerce and uncertain
trading conditions, long lease lengths can
sometimes be a deterrent to retailers considering Merging of
expansion. Shorter leases are therefore becoming the
norm, with the average retail lease length in the UK public spaces
now around 7 years. This offers flexibility to retailers Mixed-use schemes, indeed
and landlords alike, enabling the latter to attract and
ones which carry a combination of retail and leisure
maintain a relevant tenant mix.
alongside residential and office space, are becoming
Furthermore, the impending introduction of new
increasingly significant in the UK as people seek spaces
accounting standards will require businesses to declare
which they can live, work and play in. Increasing the
all lease agreements on their balance sheets, which
may impact adversely on retailers’ key financial ratios. resident and worker population of retail destinations
Committing to shorter leases may be a way of can help create a vibrant environment which, in turn,
mitigating the impact of the new rules. can benefit retail. Examples of this trend include the
extension of Westfield London, which includes 740,000
sq ft (68,748 sq m) of retail and leisure floorspace,
in addition to community space and up to 1,300 new
Involvement by Local homes. The recently completed Lexicon in Bracknell
Authorities is also part of a wider regeneration scheme which
includes other uses such as leisure, offices
As at November, investment by local authorities
and residential.
accounted for 11% of total shopping centre investment
in 2017, compared to just 0.45% in 2012, according
Property Data.
Access to relatively cheap finance through the Public
Works Lending Board (PWLB) has enabled local
authorities to acquire income-generating assets, in
addition to enabling strategic control of town centre
development. Recent shopping centre acquisitions by
local councils include: Church Square Shopping Centre
by St Helens Council in October 2017 and Saddlers
Centre by Walsall Council in August 2017. Chorley
Council meanwhile has secured planning permission
to refurbish and extend Market Walk Shopping Centre,
a scheme acquired in 2013, whilst Surrey Heath County
Council are in the process of refurbishing The Square,
Camberley, formerly The Mall.
THE DEVELOPMENT STORY: JANUARY 2018 | 6
OUTLOOK FOR 2018
An estimated 1.5 million sq ft of additional
shopping centre floorspace is scheduled for
completion during 2018, almost all of which
will be extensions to existing schemes.
PLANNED COMPLETIONS PLANNED STARTS
Westfield London Intu Broadmarsh
extension redevelopment
Developer: Intu Properties
Developer: Westfield
& Nottingham City Council
Size: 740,000 sq ft
Size: 820,000 sq ft
(68,748 sq m)
(76,180 sq m)
Opening: H1 2018
Planned start date: H1 2018
Intu Watford/ Brent Cross extension
Charter Place extension Developer: Hammerson
Developer: Intu Properties & Standard Life Investments
Size: 400,000 sq ft Size: 600,000 sq ft
(37,161 sq m) (55,741 sq m)
Opening: H2 2018 Planned start date: H2 2018
Intu Lakeside extension
Developer: Intu Properties
Size: 175,000 sq ft
(16,258 sq m)
Opening: H2 2018CONTACT DETAILS Amy Gibson John Percy Senior Research Analyst Head of Retail Development Consultancy EMEA Retail Research & Insight +44 (0) 20 7152 5929 +44 (0) 20 3296 3067 john.percy@cushwake.com amy.gibson@cushwake.com Darren Yates Toby Sykes Head of EMEA Retail Research & Insight Head of Shopping Centre Leasing +44 (0) 20 3296 3911 +44 (0) 20 7152 5240 darren.yates@cushwake.com toby.sykes@cushwake.com About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. This report has been produced by Cushman & Wakefield LLP (C&W) for use by those with an interest in commercial property solely for information purposes and should not be relied upon as a basis for entering into transactions without seeking specific, qualified professional advice. It is not intended to be a complete description of the markets or developments to which it refers. This report uses information obtained from public sources which C&W has rigorously checked and believes to be reliable, but C&W has not verified such information and cannot guarantee that it is accurate or complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained in this report and C&W shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. The prior written consent of C&W is required before this report or any information contained in it can be reproduced in whole or in part, and any such reproduction should be credited to C&W. ©2017 Cushman & Wakefield LLP. All rights reserved. For more information, please contact our Research Department: Cushman & Wakefield LLP 125 Old Broad Street London EC2N 1AR www.cushmanwakefield.com CUS101042 01/18
You can also read
