The Midlands is leading the UK in terms of the shopping centre development market, according to research published today by global property consultants Cushman & Wakefield.
Around a quarter of a million sq m of space is to be added to the market in the next 12-18 months from eight brand new centres, including three in the Midlands totalling 83,000 sq m of space.
The trio are New Square in West Bromwich (43,900 sq m), which is due to open this year; the Parkgate Shopping Centre in Shirley (19,500 sq m), and Hereford Retail Quarter (28,800 sq m) both of which are under construction and set to open in 2014.
The pipeline of shopping centre development in 2013 and 2014 is in stark contrast to the market’s performance over the last 12 months. In 2012, the UK recorded the lowest level of shopping centre development activity since 1962.
Less than 37,000 sq m of new shopping centre space was added to the market last year with only one new centre: the Tesco-anchored Swan Centre in Yardley (15,607 sq m) which opened in February 2012. It is 54 years since only one new scheme opened in the UK in a single 12-month period.
Shopping centre investment activity picked up considerably in the second half of 2012, with £1.8 billion of shopping centre assets transacted, compared with £0.8 billion in the previous six months.
Rob Alston, retail partner at Cushman & Wakefield in Birmingham, said: “The West Bromwich scheme has Tesco and Primark as its anchors, and Cushman & Wakefield is representing Deichmann, who are about to open there.
“Hereford is anchored by Debenhams, Waitrose and Next, who were advised by Cushman & Wakefield.
“Parkgate, where Cushman & Wakefield are joint agents, is a new development that is finally coming out of the ground. It has Asda as a pre-let and others are in solicitors’ hands.
“There is a perception that everything is happening around London, but the activity in the Midlands shows that there is life outside the south.”
As well as the eight new shopping centres in the pipeline in the UK, a further 11 existing schemes are being extended.
Neal Best, research analyst in Cushman & Wakefield’s European Research Group, said: “Cautious demand from occupiers will mean that demand for new space will be largely selective, with interest focused on large, well-configured units in regionally dominant shopping centres.
“Established and well-located regional centres could therefore benefit from refurbishment and extension programs, increasingly polarising the performance between prime and secondary schemes. “
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