Hammerson pulls out of Sheffield retail scheme
SHEFFIELD City Council is on the lookout for a new development partner after Hammerson pulled out of the city’s retail project.
The Council said it will begin the process to end its development agreement with Hammerson and seek a new investment partner to develop a new retail quarter (NRQ) in Sheffield city centre.
The decision has, according to both parties, been a mutual one.
Councillor Leigh Bramall, cabinet member for business, skills and development at Sheffield City Council, said: “We are taking control of the situation. We have got everything in place to make this a viable, attractive development scheme, and we can’t wait any longer to take this forward.
“I can appreciate Hammerson’s desire to ensure that this investment meets with their commitments globally and the additional finance that that may require, but the people of Sheffield have waited long enough for a new retail quarter. We are doing everything we can to make this happen, and now this means seeking a new partner.”
The announcement comes just seven months after Sheffield City Council secured the New Development Deal from Government and follows extensive work to redesign a viable scheme with long term sustainability in the current economic climate.
Peter Cole, Hammerson’s chief investment officer said it has worked hard on the project, but it hasn’t progressed enough.
He said: “We have been working in Sheffield for a number of years trying to bring the scheme forward. It is a huge project and unfortunately the recession hit, meaning retailers were not taking shops. There has been great uncertainty because of the economy and how this scheme would progress, so it has been difficult for us. The project just didn’t progress enough for us.
“We have been trying to look at new options but we are also aware that we want certainty and so does the city. We made the decision to not progress further but we will be working with them to help them bring it forward.
“We are disappointed of where we are, but we had to be realistic and we have hopefully done our best to move it forward and do the best we can. It was a mutual agreement and we are hopeful we can still help the project.”
Sheffield City Council said it has been working “extremely hard” with Hammerson and John Lewis to redesign, market test and establish the viability of a new retail quarter scheme and work out details of how it can be supported through the New Development Deal. The Council has now completed this work and believes a viable scheme exists.
Cllr Bramall said: “The Council’s view is that the city can’t wait any longer. We have the land assembled, utilities in place, have established the level of funding available and methodology to inject the funding to undertake supporting public works. We have confirmed a scheme is viable and so we will now be seeking a new development partner to move the project forward in the shortest time possible.
“There’s no reason why the NRQ can’t go ahead now. We’re in a very strong position with the viable package we have on the table, and we expect other developers to be very interested.”
Mr Cole said: “We have worked very hard to achieve a retail scheme which creates a thriving city centre environment in Sheffield. Through this process we have looked at various options to redesign the original large scale scheme which was conceived pre-recession.
“We agree with The Council’s ambition to regenerate the city centre. It is clearly a high priority. We believe that the city can build on our work to date and take forward the opportunity to create a deliverable regeneration proposal in the future.”
It is anticipated that the new scheme will include up to 700,000 sq ft of retail space with extensive food and entertainment venues along with a multi storey car park.
Hammerson is also the developer behind the Victoria Gate scheme in Leeds.
Mr Cole said: “We will keep working on the Victoria Gate scheme in Leeds. We are hoping to start work on site next March for an opening in 2016.”
