Recently in Investment Category

'Portas Pilot' Entries - A Few Favourites...

By Graham Shone on May 15, 2012 9:15 AM | 1 Comment | No TrackBacks

Housing & Local Government Minister Grant Shapps tweeted yesterday that the successful bids for town centre regeneration funds via the 'Portas Pilot' scheme will be announced at the end of the month.

With hundreds of entries reportedly clamouring for the cash, I had a look at a few of the video entries to get an impression of how the town teams were going about pitching to the government.

With an extremely broad creative brief, it is of little surprise that each submission differs from the last - and as such, it's extremely difficult to judge which ones will be successful. There are some which unimaginatively point the camera at vacant stores with the word 'Help' emblazoned across the screen, and others who have clearly tried to stand out by engaging the town in wacky dance routines in various (former) retail hotspots.

The ones which I found most appealing came from towns such as St. Austell, Warwick, Grantham and Aylsham; as they seemed to have more of a focus on what their towns specifically require in order to regain the vitality of ages past - and already appear to have a plan as to how best use the government cash.

There were also interesting entries from Ripon and St. Ives, who have focused their regeneration plans around unique heritage sites, and embraced the potential of tourism to help boost town centre footfall.

The most bizarre entry comes from Exmouth; wherein a teenage girl is apparently beamed down from space, and then escorted around the town by someone looking suspiciously like her sister, before concluding that the townsfolk are spending entirely too much time larking about by the beach, and not enough on their 'quite nice' high street, before she's whisked back into the orbit. The tagline, 'bring them here, keep them here", is altogether more sinister than was surely intended.

Also, if you'd like to see perhaps the worst impression of Mary Portas ever performed - check out Tamworth's effort.

Some common themes mentioned in almost every entry are the failure of councils to come up with innovative town-centre-saving solutions over a number of years (or even decades); the cost of town centre parking or the lack thereof; proliferation of supermarkets & out-of-town developments causing town centres to falter, and the impact that on-line shopping has had on the high street. These, of course, are aspects that the government and Ms. Portas are already painfully aware of.

One wonders how the winners will eventually be chosen. Do the video entries carry as much weight as the application form? If so, does 'view count' get factored into the final reckoning? Are CACI ratings consulted in order to determine the most deserving of town centre investment?

We'll find out in a couple of weeks - but for now, I'll champion Warwick's entry one last time...local bias at it's best!

The "Average" Retail Space.

By Graham Shone on May 10, 2012 2:44 PM | No Comments | No TrackBacks

IPD this week published their comprehensive annual lease review, which indicated that 2011 saw another decline in the average lease length taken for retail space - not to mention another increase in the percentage of leases containing lease breaks.

The study shows that over the past nine years, the average lease length has fallen from just shy of ten years to just under seven. In addition, the percentage of leases which now include a break has doubled.

The figures got me wondering about 'averages' across the retail market - and whether the available space across the country could be distilled down into one unit; the ultimate 'average space', to display what's typically available to UK retailers at this point in time.

Using samples from EGi's researched availability, which currently holds over 12,000 retail units being marketed, I found that the average retail unit currently available measures 2,941 sq ft; would be marketed with a lease length of 11.82 years; and would have an asking rent of £43,281 per annum.

Breaking these figures down by Property Type:

'Average' Shopping Centre Availability: 2,482 sq ft; 11.45 years; £72,195 per annum.

'Average' Retail Park Availability: 12,800 sq ft; 14 years; £171,094 per annum.

'Average' Other Retail Space: 1,837 sq ft; 11.57 years; £29,437 per annum.

Breakdown by Lease Type:

'Average' New FRI Leases: 3,069 sq ft; 11 years; £57,303 per annum.

'Average' Lease Assignments: 3,746 sq ft; 13.23 years; £111,547 per annum.

Whilst this is only a sample, it indicates that the space being marketed at the moment would, on average, be looking for a retailer to commit to a lease length far above that which is representative of the market. The difference between assignments and new leases can probably be attributed to struggling brands trying to divest themselves of lengthy, expensive obligations agreed during better economic times.

The majority of the 'other' retail space is located on high streets - and the fact that, on average, the £/sq ft ratio is closer to that of retail parks than shopping centres shows the level to which those spaces have struggled to attract occupiers. Indeed, shops have been going for as little as £1 per annum - so perhaps it's surprising to see the figure so high!

On average, then, retailers are currently best off going for a new lease on an out-of-town scheme; whilst the most costly deal would be agreeing to take an assignment at a shopping centre - which honestly comes as no surprise at all.

Supermarkets: Good, Bad, Or just too convenient?

By Graham Shone on February 29, 2012 2:33 PM | No Comments | No TrackBacks

EGi this week reported some good news for the supermarket investment market via a report from IPD; which indicated that it was one of the fastest-growing commercial property sectors. This is the first time that IPD has grouped supermarkets in an investment category of their own when conducting its retail investment research - and much can be read into the fact that supermarkets appear to represent a much less risky prospect for investors than other retail assets, as well as offering a higher return than other prospective investments.

Good news, then, for anyone looking to dive into supermarket ownership - and also for any of the big four seeking to boost their expansion trail by divesting themselves of any owner-occupied premises - but what might this mean for the wider retail market?

Henry Porter launched a scathing attack on supermarkets on Sunday - calling for a 'Leveson enquiry for supermarkets' to attempt to prevent these retail behemoths from, as he sees it, fattening our children, ruining town centres, causing illiteracy, encouraging alcoholism and re-introducing a form of slave labour in order to boost profits.

So, to anyone of a similar persuasion to Porter, the IPD report should make for worrying reading; as with a dearth of truly healthy investment options currently available - it could foreshadow another unstoppable extension of the power wielded by superstores.

A common argument in defence of supermarket proliferation is that we, the consumers, are complicit in their expansion by opting to give in to their lower prices and higher levels of convenience - but what happens when those factors have such force that they destroy all existing competition, removing the element of choice entirely?

Testimony from Barnstaple last year tells a typical and all-too-often heard story of how the fanfares that greeted the arrival of a new Tesco Extra were soon drowned out by the 'high street closures' klaxon just months down the line; and residents have now taken matters into their own hands - petitioning North Devon Council to stop any further supermarkets coming to the town. They are not alone, with dozens of campaigns nationwide now actively seeking to discourage supermarkets from operating in their area.

Whilst I wouldn't go as far as Porter has, and lay the blame a disproportionate amount of the world's ills squarely at the door of Tesco-et-al; the Government may well want to look a little more closely at this issue, and possibly stymie the growth of supermarkets in certain areas in order to give town centres a better chance of recovery.

Burlington Arcade restoration begins

By Annabel Dixon on January 20, 2012 2:07 PM | No Comments | No TrackBacks

Regular readers of our retail blog will recall an earlier entry on the brewing row between owners and tenants of the Burlington Arcade on Piccadilly, W1, over plans to breath new life into the building.

Meyer Bergman, the European real estate firm that bought the Grade II-listed arcade in October 2010, has now revealed the first pictures of proposed new restoration works following the receipt of Planning and Listed Building Consent.

Work has now started and the first phase, which will focus on restoring the upper elements of the arcade, is expected to be complete by the end of April. It involves the installation of up-lighting and the re-painting of the painted elements in the original ecru white colour used in 1819 when the arcade first opened.

Work is being undertaken out of trading hours to allow shopkeepers to remain open for business throughout the process.

Markus Meijer, chief executive of Meyer Bergman, Burlington Arcade's co-owner, said: "We expect these works to be complete in time for the Queen's Diamond Jubilee celebrations and I am particularly excited that, once complete, we will have a view not seen for over 100 years and possibly not since Queen Victoria celebrated her Diamond Jubilee in 1897."

Retail Crime: The 2011 Picture.

By Graham Shone on January 17, 2012 10:23 AM | No Comments | No TrackBacks

The British Retail Consortium this week published the results from its annual survey on retail crime, and it makes for very interesting reading.

Taking a sample of 52 retailers who account for 53% of the total UK retail turnover, BRC painted a picture of retailers experiencing fewer acts of criminality than in 2010, but the cost per incident rising dramatically to the overall tune of 31%. This figure doesn't even include the costs of the August riots - which, instead of causing 2011 to become a giant anomaly, are spotlighted at the end of the report, rather than being factored into it.

Increased cost per incident is one theme seen throughout the report, as it goes through the various felonies in detail. Theft was down 19% on 2010, but each theft cost retailers £85.50, an increase of 21% year-on-year; and there's a similar tale with burglaries, the number of which decreased by 42% to the lowest figure in seven years, yet the cost per incident increased by 83% to £2,093 for every offence. Additionally, employee theft is down 24%, but the value stolen each time has gone up 18%.

A clearer picture is given by the statistics for robbery, violence towards staff and criminal damage; all of which saw an increase of 20%, 83% and 63% respectively on 2010 figures. Little solace can be taken from the fact that the 83% increase in violence towards staff is mainly verbal, with the acts of actual physical violence the lowest in seven years. Abuse in the workplace is, as the BRC puts it, an 'unacceptable threat', and they encourage retailers to be more willing to report incidents across the board to help put a stop to this.

In addition, the BRC calls for further investment from retailers in crime prevention, an increased awareness of the damage caused by fraud and e-crime to retailers - seen as an 'easy opportunity' for criminals, and further co-operation between the BRC and police forces. The BRC state that a replication of the scenes of August 2011 are 'conceivable', given the deepening economic crisis, and that they can play an important role in communicating effectively with businesses during moments of unrest.

It was just such a moment in August which threw criminality against retailers into the public spotlight - and the figures outlined on the impact of said events are rather harrowing. The riots affected 20,000 employees - 1.5% of the UK's retail workforce; they cost the retailers in the survey £18.3 million in theft, criminal damage, burglary, arson and store closures. Additionally, an impact on sales was experienced by 56% of those surveyed.

One can't help but think that, were the figures from the UK riots included in the report, the figures that indicate 'below-7-year-average' figures for theft, burglary, robbery and criminal damage would not look quite so rosy. If the BRC are correct in their suggestion that a similar spate of lawlessness could hit the UK this year, retailers have to make sure that they are better safeguarded against experiencing a similar loss.

The full report is available here.

Keighley Retail Loop to be Completed by Stainsby Grange.

By Graham Shone on December 9, 2011 2:12 PM | No Comments | No TrackBacks

My attention was drawn earlier this week to an application by Stainsby Grange to construct a

new retail scheme in Keighley. The development will be called 'Worth Valley Shopping Centre', and already has its own website, detailing which brands the company are hoping to entice to the scheme. The developers have indicated that this development is designed to complete Keighley's 'natural retail loop', illoustrated on the right.

This loop already contains two major retail schemes: The Cavendish Retail Park and The Airedale Centre, both mentioned in the retail statement accompanying the application as being infeasible sites for redevelopment as they contain a tenant mix committed to medium and long-term leases. A new mall, therefore, was seen as the key to moving Keighley's retail status forward, and rubber-stamping the town as the primary retail destination in the Airedale corridor, and after a six-year land acquisition process, Stainsby Grange have now gone

Tying in nicely with my previous blog, the developers have, admirably, taken pains to explicitly write in the Design and Access statement that social media has been embraced, with the creation of www.facebook.com/worthvalleyshoppingcentre. The site currently has 22 'likes' and 1 'talking about' - which isn't actually too bad for a shopping centre by comparison, but maybe a bit more promotion in the right areas is needed for the site to take off.

If, as indicated, construction is due to begin in early 2013 it would be a welcome fillip for the retail development pipeline, which is looking rather shaky after the nearby Trinity Leeds completes. Additionally, £300 million worth of local investment combined with the creation of 500 jobs is nothing to sneeze at - particularly in an area that has been measurably blighted by the economic downturn.

The real test, of course, comes after opening; when we will be able to gauge if indeed Worth Valley has contributed to or detracted from the retail market in Keighley. Careful measures need to be taken to ensure that there is no temptation to draw trade away from Airedale or Cavendish, even if a further downturn in the retail market necessitates a shift in target occupiers.

Out with the football, in with the retail.

By Graham Shone on December 1, 2011 3:44 PM | No Comments | No TrackBacks

An interesting development in Basingstoke today; the local football club has decided to switch from the old Camrose stadium to a new 5,000-capacity ground adjacent to the Hilton Hotel in order to meet the requisite standards to play in a higher league.

The old ground will be sold off in order to fund the new £10 million arena, and turned into a new retail park, the size of which seems to have baffled our beloved BBC. They list the intended size of the new scheme as being 90,000 sq ft (27,432 sq m) - which is an astonishing mismatch of metric and imperial measurements to the tune of being wrong by 19,072 sq m!

I once met a Basingstoke resident who told me that the Camrose Stadium was, in fact, spelt entirely with capital letters in all local publications; and as such needed to be shouted at every mention. I look forward, therefore, to the planning, building and letting of the CAMROSE

SHOPPING PARK, where all customers and staff will be forced to bellow at each other over every transaction, or face ejection from the premises.

This is another example of the growing link between stadia and shopping arenas. In Milton Keynes, MK1 Shopping Park will be situated directly adjacent to the MK Dons stadium upon completion next autumn. Similarly, Southend United's new stadium (left) will feature 23,000 sq m (247,600 sq ft) of retail space to accompany flats, a hotel and a conference centre.

Coming soon to the Hoo Peninsula...

By Graham Shone on November 16, 2011 11:43 AM | No Comments | No TrackBacks

...An entirely new town!

Medway Council this month received a planning application from The Defence Infrastructure Organisation, (c/o Land Securities and CB Richard Ellis), to turn the site outlined below into a new community:

At the centre of the 325-hectare site will be a new 35,000 square foot supermarket,

supplemented by a further 22,000 square feet of mixed-use retail. The offer is designed to support the occupants of some 5,000 new residential units in the new community who, presumably, will be instantly offered work in the 395,000 square feet of office space; and send their children to one of the FOUR newly-built schools.

So often we hear about town centres looking at redevelopment - it was a little novel to come across these plans; which seem to have eschewed the traditional option in favour of simply plonking a new urban centre on agricultural land. Judging by the photos on the enormous Design and Access statement supplied, the site has been little more than an abandoned train station, used in part for occasional military procedures.

The twenty-year development schedule may well render my 'Coming soon' title a little wayward. the images on the right display where and when this new community is going to spring up. These, of course, are outlines. The developers admit themselves that the growth engine for Lodge Hill will be residential development - an element which itself is governed almost entirely by market factors. Site preparation for the first set of new-build homes may not get underway until 2013, meaning that even at the most optimistic estimate, we won't see a completed urban centre until 2033.

Nonetheless, I look forward to viewing the series of reserved matters applications which will supplement this site. Strewn within the planning documents are references to other successful market communities from which all concerned with this project could take inspiration.

The Pantiles, in Tunbridge Wells is used as an example of a retail hub within a market town supported ably by the residential community it serves. Also mentioned is Delft in Holland, a municipality whose rustic 13-century design embraced the existing layout of the land on which it stood, allowing for easy orientation via straight, grid-pattern streets.

Design will be key in ensuring the scheme's success as a market town. Everything needs to be walkable, with little or no chance of sprawl occurring at the site edges; the layout of the town centre needs to encourage flexibility for building uses without running the risk of allowing overbearing architecture to encroach on the town's idiosyncrasies.

We will have to wait and see just how long it takes for the outline application to get the thumbs-up, but with Medway Council's own economic targets looming over them, it is likely that they will endeavour to get this project off the ground sooner rather than later.

A brewing storm in Croydon

By Annabel Dixon on November 11, 2011 4:16 PM | No Comments | No TrackBacks

Poor Croydon. The town centre is crying out for a cohesive, coherent retail-led regeneration strategy but, judging by this week's events, I suspect it will be some time before a happy conclusion is reached.

Westfield's jubilation on Thursday that it is to act as a development partner to the Whitgift Foundation, which owns the freehold and a 25% long leasehold stake in the town's Whitgift shopping centre, was short lived.

It transpired that Royal London and Irish Bank Resolution Corporation, formerly Anglo Irish Bank, which together own 75% of the long leasehold and the management of the mall, had no idea that Westfield and the Whitgift Foundation were striking a deal.

The new agreement has all the potential to frustrate IBRC in particular, since it has been advised by Jones Lang LaSalle throughout 2011 on a strategy both for its stake and the wider redevelopment of the Whitgift shopping centre.

The indications so far are that the brewing storm will accelerate Royal London and IBRC's ambitions to seek out their own development partner for the mall.

Now you can bet that Hammerson, the new owner of neighbouring shopping mall Centrale, and Minerva, which long held ambitions to develop out a neighbouring Croydon retail scheme, Park Place, will both be keeping a keen eye on proceedings. And firms including British Land, Land Securities, Capital Shopping Centres and Lend Lease have all flirted with the idea of investing in Croydon over the years.

So which investor - developer will catch Royal London and IBRC's eye? And what will be the reality of having potentially two parallel development agendas for one shopping centre?

For those familiar with the development of Croydon town centre, this will be just another twist in a long-running saga. But for those new to the scene: watch this space. You're in for a ride.

Déjà vu at the Burlington Arcade

By Annabel Dixon on October 28, 2011 12:07 PM | No Comments | No TrackBacks

The brewing row between the owners and tenants of the Burlington Arcade on Piccadilly, W1, has a distinct sense of déjà vu about it.

More than 34,000 people backed a petition in January 2010 calling for action after 150 traders were ejected from Portobello Market, W11, in favour of an All Saints store.

They argued that the changes to Lipka's Arcade, undertaken by landlord Warren Todd, threatened the character of one of the capital's top tourist attractions and accused him of jeopardising the market in pursuit of high rents.

Fast forward more than a year and a half, and the same argument is now being thrashed out under the arches of the Grade II-listed arcade in Piccadilly.

Meyer Bergman and Thor Equities, the owners of the Burlington Arcade, are threatening to replace boutique retailers, some of whom have traded there for more than 50 years, with glitzy brands such as Jimmy Choo. They have also hired New York-based retail guru Peter Marino, famed for his black leather cap and sunglasses combo, to head up a reported £2.5m makeover of the arcade.

Daniel Bexfield, who has run a silver shop in the Burlington Arcade for 13 years, has branded the joint venture's plans for the arcade as "Dubai style" and Susanna Lovis, a specialist in Victorian and Edwardian jewellery, warns that it risks being turned into another Westfield mall.

As the mood at the arcade becomes increasingly sour and Bexfield's protest gathers momentum - film director Michael Winner recently waded in - it's hard to see an easy and peaceful solution to this familiar dispute.

Bargoed's Big Idea Becomes a Reality

By Graham Shone on October 14, 2011 10:46 AM | 1 Comment | No TrackBacks

Construction work on the retail element of the Bargoed Town Centre Regeneration project is set to begin next month, with Simons Group having recently exchanged the development agreement with Caerphilly Council on the £24 million scheme.

There will no doubt be stories this weekend that will grab more attention in South Wales, but once any short-term economic boost delivered by a victorious World Cup campaign fizzles out; the region would still be festering in dire economic circumstances.

The development has already delivered a new £25 million by-pass known as Angel Way to the East of the town centre, and a modern transport hub in northern Bargoed. The retail plateau is undoubtedly the crux of the project, and will provide a new Morrison's superstore measuring 56,000 sq ft and 7 supplementary retail units ranging from 1,700 sq ft to 5,250 sq ft. Perhaps the figure that will matter most to locals, however, is the provision of an estimated 300 new jobs in an area that suffered enormously following the recession, and is still lagging behind most areas of the U.K. in its recovery.

This video was produced in January 2011, highlighting the areas of the town to benefit from the scheme. Below are artists' impressions of how the new retail plateau will look:

I believe the key to the success of the scheme so far is it's viability. EGi reported today on a retail development site in Newcastle which has stalled, then re-started, and then stalled again - before being bought outright this year....and then stalling. The partnership of Simons and the Council, by contrast, have carefully tailored the project to the needs of Bargoed. It is a clear example of rejecting over-ambition in favour of realism - hopefully this will provide a template from which other developers can take inspiration.

For more info on the scheme, visit the official site here.

Endorsements Aplenty for Stoke Proposals

By Graham Shone on September 28, 2011 10:10 AM | No Comments | No TrackBacks

Stoke-on-Trent may not be the first place one would instinctively look for a positive retail story ahead of rent quarter day looming large at the end of this week, yet my attention has been drawn to two major developments in the Staffordshire Town's retail scene over the last fortnight.

First, Stoke resident and 15-time darts world champion Phil Taylor endorsed Realis Estates' re-branding and unveiling of their multi-million pound City Sentral scheme at BCSC this month; stating that he was particularly concerned about youth unemployment in Stoke, and that this kind of project would help to remedy that. There have been a few concerns from locals over the new name, and the fact that anchor tenant Marks and Spencer already has a presence in the town centre has raised a hint of antipathy, which Realis will have to dampen by attracting exciting mix of tenants at the 70 supplementary units. Perhaps most crucial to the plans will be the proposed 1,000 car parking spaces in addition to the re-vamp of the bus station, which ought to make access to the town centre a great deal easier. Taylor's resounding positivity may not be unilateral at the moment, but taking the long view - this scheme ought to benefit the town both economically, and aesthetically.

More recently, Capital Shopping Centres received an almost unanimously positive verdict from visitors to The Potteries centre, after consultation postcards were distributed to shoppers asking for their opinion on the developer's plan to add 58,000 square feet of leisure space to the scheme by 2014. The survey resulted in a 99% approval rating for the plans, which include six new restaurant units and a cinema. A formal application is expected later this year for the extension, to be known as 'The Avenue', with 100 construction jobs to be provided once the proposal is given the thumbs-up.

Both Realis and CSC will be hoping that their respective proposals for Stoke can provide a fillip to a city that has recently experienced a mite of negative press, and will undoubtedly be inspired by the positive impacts that Bury and Wakefield experienced after major retail developments. The former jumped 59 places in the CACI 2011 retail footprint following the opening of The Rock in July last year, and Trinity Walk has helped to bump Wakefield up 48 positions. Given the level of investment mooted for both schemes, developers and residents must surely be looking to at least emulate those achievements in the Potteries.

« Developers | Main Index | Archives | Leasing »

Recently in Investment Category

'Portas Pilot' Entries - A Few Favourites...

The "Average" Retail Space.

Supermarkets: Good, Bad, Or just too convenient?

Burlington Arcade restoration begins

Retail Crime: The 2011 Picture.

Keighley Retail Loop to be Completed by Stainsby Grange.

Out with the football, in with the retail.

Coming soon to the Hoo Peninsula...

A brewing storm in Croydon

Déjà vu at the Burlington Arcade

Bargoed's Big Idea Becomes a Reality

Endorsements Aplenty for Stoke Proposals

Categories

Monthly Archives

Subscribe to EG

Search

About this Archive

Other EG Bloggers

Recently in Investment Category

Subscribe by E-mail

Categories

Monthly Archives

Subscribe to EG

Search

About this Archive

Other EG Bloggers