Shopping centres

Citation

(2001), "Shopping centres", Property Management, Vol. 19 No. 1. https://doi.org/10.1108/pm.2001.11319aab.015

Shopping centres

Shopping centres

Apart from Chelsfield's W12 (White City) development, the Hampshire Centre proposals and a smattering of minor factory outlet developments, "out-of-town" shopping centre development activity in Britain has effectively ceased – according to CB Hillier Parker's latest Shopping Centres in the Pipeline research. Overall town centre shopping development activity levels also remain at historically low levels. The last five years or so has seen a resumption in developer interest in town centre schemes however, as long as they are big.

CB Hillier Parker Director Russell Banham comments:

Shopping centre development these days is a critical mass game: the reason that a handful of very major schemes continue to account for the bulk of all new shopping centre floorspace in the pipeline. Overall pipeline totals have fallen because of the curb on out-of-town development. Cities, and major town centres, have however continued to attract substantial developer interest. It is small markets that have lost out: the markets that boosted pipeline totals in the 1980s boom. As long as retailers continuing to retrench into major markets and planning opposition to out-of-town development continues then the pipeline levels will hover at around the 4 million m² gross level.

Shopping centres in the pipeline

The growth trend for shopping centres continues in the pipeline (see Tables I and II). Following the steady rise in town centre activity throughout the late 1990s, the amount of town centre floorspace under construction at the end of the first quarter of 2000 exceeded the 600,000 m² gross level for the first time since the end of the late 1980s boom. At the same time the amount of out-of-town shopping centre construction has fallen to its lowest level for five years.

The total shopping centre development pipeline has fluctuated between the 3.5-4.0 million m² gross level for the past four and a half years. The amount of floorspace in out-of-town shopping centre schemes is now at one of its lowest ever levels.

Following a record annual completions total of almost 95,000 m² gross for 1999, the pipeline for factory outlet centres has seen a further decline. By the end of the first quarter of 2000 the level of floorspace had fallen to 288,600 m² gross.

Whilst completions for 2000 were expected to exceed the 100,000 m² gross level, with few new schemes being proposed/approved, the pipeline was expected to contract further. Beyond 2000 openings are expected to be on a more modest scale.

The amount of floorspace in shopping centre schemes of 40,000 m² gross and over continues to grow, accounting for over a third of the total floorspace. However, following the completion of Braehead Riverside (Glasgow) and the major phase of The Oracle (Reading), the proportion of larger schemes under construction has actually fallen. At the end of March 2000 there were only two schemes of 40,000 m² gross and over under construction. These were West Quay, Southampton and Touchwood, Solihull, both town centre schemes.

In the first quarter of 2000 a total of 95,600 m² gross was completed. Developers reported that they hoped to complete a further 378,100 m² gross, all in-town, by the end of 2000.

Our forecast, based on an assessment of those schemes currently under construction and others capable of completion by the end of 2000 concurred with this view. By the end of 2000, we forecasted that a total of some 470,000 m² gross would have been completed. Unlike the previous two years, when out-of-town shopping centre schemes amounted to at least half of the total openings, town centre openings were expected to dominate the 2000 total.

Table I Phases and extensions in the pipeline

Table II Factory outlet centres in the pipeline

Scheduled openings for 2001 look set to fall to 453,000 m² gross. We expect actual completions to fall even further to about 350,000 m² gross for the year. We anticipate that out-of-town shopping centre schemes will not exceed 10 per cent of the annual total.

On the assumption that the main economic indicators remain static over the next 12 months, we expect shopping centre completions to rise in 2002 to around the 400,000 m² gross level.