PalaceXchange will transform retail in Enfield, North London
Pipeline picks up
Published: 18 January, 2006
This year will see a surge in shopping centre openings. What are the
prospects for the class of 2006?
The past year has seen shopping centre development completions at a low ebb, but 2006 will see the long-awaited wave of new development activity beginning to take shape.
Research from Lunson Mitchenall, carried out on behalf of BCSC, shows an upsurge in activity in 2006 with almost two dozen developments or extensions due to complete. And there is even more to come. Lunson Mitchenall estimates there is a massive 50 million sq ft of new retail space in the pipeline.
But with the average retail development now taking 11 years from inception to completion not all of this is going to arrive at once: the agent calculates that there is currently 17 million sq ft being built and another 13.5 million sq ft with planning permission.
So what are the prospects of oversupply swamping the market? Lunson Mitchenall director Neil Mitchenall takes a sanguine view. “This may seem a large area,” he says, “but it is important to note that the majority of this potential retail development is being planned in response to what is perceived as future market needs.”
The biggest scheme due to open in 2006 is P&O Estates and Morgan Stanley’s £200m Drake Circus in Plymouth which is on target to open in the Autumn. Already, the scheme is more than 70 per cent pre-let following a deal with Next for the final 64,500-sq ft anchor unit.
The other two anchors are Primark and M&S and according to Graham Corser, senior development surveyor at P&O, the letting campaign is proceding well, with all of the MSUs now in place following deals with M&S, Zara, H&M, Virgin Megastore, New Look, Boots and Ottakars. A large number of the smaller units are either let or under offer.
Corser says rents had exceeded preliminary projections with some smaller units achieving £190 Zone A, compared with £145 Zone A in New George Street, the city’s existing prime pitch. “Securing Next for this key anchor unit is a real coup for Drake Circus - it will become their largest trading store in the West Country and will rank within their top ten nationally,” he says.
Joint letting agents for Drake Circus are Lunson Mitchenall and Hartnell Taylor Cook.
But arguably the most innovative scheme of the year is Ayr Central, the new £65 million 350,000 sq ft scheme in Ayr which brings out-of-town sized units into a town centre context. New research from CACI forecasts the scheme will catapult Ayr into fifth place in the Scottish retail hierarchy when it opens in April 2006.
According to Alan Kinloch, regional development manager at Henry Boot Developments, it was the signing of Debenhams for an anchor store at the entrance to the scheme that cemented its transformation from retail park to shopping centre, and now it has attracted a strong fashion line-up featuring H&M, Next, Primark, Au Naturale, HMV, USC and 19 other high street names.
But Ayr Central still retains some of the attributes of a retail park: all of the units are double height which means tenants can install mezzanines, and this means it is a very cost-effective place to do business. Integral to the scheme is the largest single level underground car park in the UK with 495 dedicated spaces.
Kinloch is confident that this hybrid formula will work. “Ayr Central will provide an exciting and vibrant new shopping destination for the people of Ayr,” he forecasts. “I believe that it will remain a focal point in the town for many years to come.”
In Enfield, north London, ING Real Estate Development is on target to open PalaceXchange in October 2006, providing 160,000 sq ft of retail space in 22 units over ground and first floors plus a 40,000 sq ft civic amenity for the London Borough of Enfield. The scheme includes a 530 space multi-storey car park.
PalaceXchange is approximately 80 per cent let and confirmed tenants include TopShop, New Look, Next, Superdrug, Ottakar’s, TK Maxx, Clarks, Caffé Nero and Dorothy Perkins. Units are currently available ranging in size from 900 to 25,000 sq ft through letting agents Chase & Partners and Nash Bond.
The open-air scheme will increase the retail provision in the town by more than a quarter. Reid Architecture’s design aims to link together the town’s three main anchor stores - Marks & Spencer, Pearsons Department Store and Woolworths – while introducing a full range of shop sizes to offer retailers flexible space previously unavailable in Enfield.
And development is not limited to town centres. Despite the tough planning climate a number of new retail parks are under development. For instance, The Junction is currently on site with phase one of its redevelopment of The Junction Wembley Retail Park directly opposite the rebuilt Wembley Stadium. On completion in Summer 2006, the park will total 210,000 sq ft of retail-led mixed-use space.
Phase One provides 14 bulky goods retail units, 14,800 sq ft of office space, 10,200 sq ft of restaurant space and an 11,800 sq ft ‘Pod’. Phase Two, due to begin construction in 2006, will see further reconfiguration on the site and additional retail space.
New tenant Wickes will occupy a 52,350 sq ft unit on the park on a 20-year lease at £20.50 psf. The redevelopment accommodates existing tenants into high quality refurbished units, including Carpetright, Comet, Harveys, Land of Leather, Sleepmaster, Joysleep, Allied Carpets and MFI.
Ian Harris, development director of The Junction, says: “Our approach at Wembley is to maximise the space of the retail park, unlocking the under-used commercial potential in order to complement the wider regeneration of Wembley’s town centre.”