Doubts over retail schemes persist, claims expert

DEMAND for prime retail space in towns and cities throughout Yorkshire is continuing but at a reduced level, according to research by property consultants King Sturge.

Plummeting consumer confidence, fuelled by fears about the credit crunch and reduced footfalls, has created doubt over the completion of some of the region's major shopping centres, says the head of King Sturge's Leeds-based in-town retail team, Jonathan Newns.

Mr Newns said: “Most developers and retailers believe that, if a US recession is not prolonged and the UK economy remains fundamentally strong, market conditions will steadily improve and they will claw back much of the value lost during the last difficult 18 months and the current uncertainty.

“Retail developers are at the sharp end when consumer confidence falls amid economic fears, usually because schemes have been planned for several years.

“During the last 12 months, the retail investment market has been hit hard by the shift in yields, notably The Mall, the retail fund of landlord, Capital & Regional, London, which owns The Mall, Barnsley, which is having to sell a proportion of its portfolio, including trade park ownerships, to inject more cash in to its retail fund.

“British Land recently lost £80m on the value of Meadowhall Shopping Centre, Sheffield, and a number of key investment sales have been withdrawn from the market including schemes in Chester, Lincoln and Walsall.

“All the signs, from our enquiries, are that the retail property market, like the wider economy, is finely balanced. Even though some shopping centre managers in Yorkshire are reporting a footfall 15% per down on last year, demand for prime space is continuing albeit at a reduced level.”

However, Mr Newns claims that in Yorkshire retail developers are “toughing out” the downturn and progressing major schemes which demonstrates a confidence in the region.

“Caddicks and Land Securities have started on site with the proposed Trinity Quarter, Leeds,” he said. “Westfield has ordered its steel supply for Broadway, Bradford; the Delancey/Lasalle partnership has purchased Yorks's Coppergate scheme, together with its extension proposals, and Waxy is progressing its extension to the Kingsgate Centre, Huddersfield.”

Mr Newns added: “Between 2010 and 2012 retail development in Yorkshire will see a new generation of schemes coming on stream. There will, undoubtedly, be some empty units in these when they open but, with high street retailers continuing to agree deals, it's likely that the majority of schemes will launch as expected and build their success as the economy improves.”