Real estate company Land Securities is leading the way with retail developments at present, having today announced plans for a further one million sq ft in builds.
A total of £275 million is being invested in a mixture of new sites as well as reconfigurations & extensions to existing properties in order to meet the high demand for new space by food and fashion traders.
The construction pipeline for retail properties has been decidedly dry of late, but Land Securities has been one of the only property firms to carry on investment in the sector, with its Trinity Leeds build the only major shopping centre scheduled for construction in 2013.
In first quarter results published today the firm revealed that the Yorkshire-based centre is now 54.8 per cent let, up from 51.8 per cent on March 31st 2011, following planning permission being granted for a 90,000 sq ft Primark store at the site.
Francis Salway, CEO of Land Securities, said: “Despite the mixed messages in the retail sector, our leasing activity demonstrates that the stronger retailers are looking to take new space.
“This retail demand has meant we have over the last few months also begun to step up our activity in retail development predominantly in edge-of-town locations and we now have a £275 million, one million sq ft, pipeline of opportunities to meet the growing demand from food and fashion retailers for space.”
During the three months to the end of June, Land Securities’ void level for its like-for-like (LFL) retail portfolio fell from 4.5 per cent to 4.1 per cent, though trading in its shopping centres dropped 0.4 per cent LFL compared to the same period in 2010.
Although London is proving a much stronger investment option for many firms at present, the real estate group is also undertaking a number of builds around the UK.
Its Buchanan Street scheme in Glasgow is now 68.7 per cent let with Forever 21, Gap and Paperchase all signed up, and of the eight remaining units at the site one is in solicitors’ hands and terms have been agreed on a further four.
Salway added: “We entered the financial year with a clear plan, and the letting and sales activity we have undertaken in the first quarter underpins our confidence in this plan.”
Retail units in administration rose in the quarter by 0.3 per cent thanks to the failures of the Focus DIY and Habitat businesses, whilst shopping centre footfall remained flat year-on-year.