Why are new and refurbished shopping centres reaping the rewards?
Retailers are increasingly focusing on new or significantly refurbished UK shopping centres, with these schemes accounting for 63% of leasing transactions in the 12 months to June.
The report ‘UK Shopping Centres – Dead or Alive’ analyses over 350 leasing deals undertaken by Cushman & Wakefield over the year to June and provides a unique insight into the current state of the sector, as well as highlighting the future trends impacting on shoppers, retailers and landlords.
Evidence shows that investment in the quality of shopping environment, the customer experience and brands is leading to a corresponding rise in sales and leasing activity.
Crucially, it also means enhanced rents for the best schemes, as they become more important to retailers who are increasingly selective about store openings.
The trend towards more flexible and shorter leases is also continuing, with an analysis of leases signed over the year to June showing an average length of 6.2 years.
Landlords are increasingly embracing flexible leasing strategies, both to incubate new brands and to create opportunities to drive growth.
Darren Yates, Head of EMEA Retail Research & Insight, Cushman & Wakefield, said: “Traditional anchor stores, such as the large department operators, are consolidating both in terms of size and number of outlets, while the international multi-brands are seeking more space.
“It’s also true that parts of the shopping centre sector remain challenged and the shakeout of weaker schemes will continue. While this will lead to the repositioning or redevelopment of some shopping centres, it will also give rise to regeneration opportunities. However, we do not see this as a negative trend – more as part of the ongoing evolution of retailing and the continuous renewal of our urban landscape.”
The trend is being demonstrated at Exeter’s Guildhall Shopping Centre where plans have recently been submitted by the landlord Aviva Investors to extend the 300,000 sq ft scheme to include a new bowling alley and restaurant elements.
The plans follow the completion of a new food quarter called Queen Street Dining which has proved popular with consumers.
Darren Freed at Aviva Investors said: ‘This is an exciting phase 2 redevelopment following on from the successful Queen Street Dining from last year and is a good example of meeting Aviva Investors’ long term strategy by focusing on specific target locations and finding ways to increase shopper engagement and create destinations in their own right.
“The additional restaurants and leisure offering will help us deliver this and we are delighted to take the success of the Guildhall to the next level.”