Victoria Gate now 40% let as developer reports strong results

LEEDS’ next large retail development at Victoria Gate is now 40% let, site developer Hammerson has said.

The development started on site last April and is scheduled to be be finished in the third-quarter of next year.

The first phase is for 34,000 sq m, which includes the John Lewis store, with an additional 8,000 sq m to follow in phase two. Phase one is expected to generate £10m a year in rent income, once initial rent-free periods have expired.

David Atkins, Hammerson chief executive, said: “Construction work for the first phase of Victoria Gate, Leeds commenced in April 2014. The 34,300 sq m scheme is adjacent to Victoria Quarter, which was acquired in 2012.

“The £150m development will consist of three main buildings: a flagship John Lewis store; a two-street arcade with more than 30 aspirational retailers and restaurants; and an 800-space multi-storey car park. Leasing progress is encouraging, with 40% of the retail income let or in solicitors’ hands.”

Victoria Gate is the largest of six developments Hammerson is currently on site at, as with the group developing 116,200 sq m.

Hammerson has also announced pre-tax profits of £703.1m for the year to December 31, although valuation changes contributed £547m.

Its net rental income rose by £22.8m to £305.6m, which was a result of a growth in space but also a 2.1% increase in like-for-like income.

Mr Atkins added: “We have delivered strong results on the back of a significant uplift in asset valuation and continuing income growth. The recovery in UK consumer sentiment has continued to strengthen, driving increased demand from retailers for prime space, which is now translating into ERV growth across the whole portfolio. In France, we have seen an encouraging improvement in performance, reflecting the success of our refurbishment programme.

“We have built a successful track record, growing shareholder dividends by close to 25% over the last three years. With strong momentum across our markets predicted to continue, bolstered by further growth from our prime portfolio, strategic exposure to the fast growing outlet sector and our major development programme, we remain confident in our ability to deliver sustainable growth going forward.”