UK shopping centre development hit a four-year high last year, but subdued activity is expected in 2014 and 2015 as the market continues to recover from the economic downturn, according to research published today by global property consultancy Cushman & Wakefield.
However, a notable uptick in development is expected from 2016, with large schemes already in the pipeline and new projects on the horizon. This surge in activity in two years time will be led by Victoria Gate (117,100 sq m) in Leeds, the largest addition to the UK market since Westfield Stratford, and followed by Westfield Bradford (51,500 sq m) and the regeneration of Bracknell town centre (53,900 sq m).
It is anticipated 107,200 sq m of shopping centre space will be completed this year and 79,100 sq m in 2015. The most significant addition is likely to be the British Land development of the Old Market in Hereford, which is anticipated to be completed in Q3 2014 and will add 28,600 sq m of shopping centre space.
Following a strong start to 2013, development activity in the country slowed slightly towards the year end. Nevertheless, a total of 289,200 sq m of shopping centre space was delivered in the UK last year – the highest figure since 2009 and eclipsing 2012’s meagre total when only 37,000 sq m became available, the lowest recorded level of shopping centre development activity since 1962.
The bulk of development in 2013 – approximately 88% of the total space – was completed in the form of 11 new shopping centres, whilst the remainder consisted of 13 new extensions to existing schemes.
Total shopping centre floorspace in the UK now stands at over 16.9 million sq m spread across 713 schemes.
Alistair Parker, partner in Cushman & Wakefield’s retail development team, said: “Extensions and refurbishments will remain a common theme in the next 18 months or so, with owners keen to add modern space and renew older stock in order to address leisure demand and the need for centres to offer a memorable experience.”
Martin Mahmuti, senior investment analyst at Cushman & Wakefield, said: “The subdued pipeline does mask the improvement in market sentiment, retail spending, finance availability and economic growth currently underway. Indeed, a considerable acceleration in development is expected from 2016, with large schemes already in the pipeline but also new projects being created by more eager developers.”