Colliers warns of development pipeline logjam
Published: 08 January, 2010
Despite the savage recession, the overall shopping centre development pipeline is only 6.3% lower than at this time last year, according to new research from Colliers CRE. The agent calculates there is now 43.7m sq ft of shopping centre floorspace either under construction, with permission or in the planning stages in the UK.
Colliers calculates that 2.6 m sq ft of new shopping centre floorspace was completed in 2009, down from 8m sq ft in 2008. And it expects almost 2.7 million sq ft of shopping centre floorspace to complete in 2010.
The largest scheme to open next year will be Hammerson and HBOS's The Rock in Bury. It will provide over 500,000 sq ft of retail space, anchored by Marks & Spencer and Debenhams, and is due for completion in July. Another significant project is Capital Shopping Centres’ Eldon Square South extension in Newcastle upon Tyne. When completed in Spring 2010, it will provide a further 410,000 sq ft of retail space, bringing the scheme up to 1.3 m sq ft.
Also of note is Allied London’s The Avenue in Spinningfields, Manchester, providing 400,000 sq ft of luxury retail, and Simons Developments’ 285,000-sq ft St Catherine’s Walk in Carmarthen.
Significantly, the 6.5m sq ft of shopping centre space that is under construction accounts for just 15% of the total development pipeline. Another 16m sq ft of new shopping centre floorspace has planning permission but work has not yet started on site. In many cases construction was originally due to have started by now but work has been put on hold indefinitely with no clear timetable in place for progress in the future.
The remaining 50 per cent of pipeline space is in the pre-planning or application stage. This includes the mixed-use redevelopment of the 40-acre Battersea Power Station site, where a planning application was submitted in October for 700,000 sq ft of retail space. Also of note is Lakeside in Thurrock where Capital Shopping Centres has begun to work up plans for an extension following the scheme’s designation as a regional shopping centre within the East of England which will allow for new retail floorspace. Plans could be submitted as early as next year for over 500,000 sq ft of new shops to be built by 2019.
Colliers warns that forecasting future supply is an inexact science, because developers are remaining very tight-lipped about construction timescales in the current unpredictable economic climate. However it concludes that however much developers say they are committed to their projects it is likely that many of the schemes in the pipeline will never be built out.