Only four per cent of the current UK shopping centre pipeline is classed as “under construction”, according to new research by global commercial real estate group Colliers International.
The property firm said this week that of the 34.2 million sq ft of new shopping centre floor space planned in the coming years, just 1.4 million sq ft of that is currently being worked on, which suggests that “there is still little positive movement in terms of development”.
Land Securities’ Trinity Leeds scheme, a £350 million project which is due to open in the spring of 2013, provides one million sq ft of this retail space alone.
Colliers says that the majority, 53 per cent, of new schemes are at the permission stage, while the remaining 43 per cent are yet to apply for or secure planning consent, suggesting that many of these will not actually get started at all.
Greg Styles, Head of Retail Development at Colliers International, said: “The development projects that are likely to remain deliverable are those situated in a prime location in major towns and cities that have an undersupply of quality floor space, a sizable shopper population and where the land is in control of the developer, together with convenience food store anchored schemes in smaller towns.
“We expect that many proposals, particularly those in medium-sized towns, will fall out of the pipeline as developers recognise that they are no longer feasible and the amount of shopping centre floor space that will actually be built will be much lower than the current total pipeline figure.”
However, the positive news for the retail property industry lies in the fact that 2011 saw 2.45 million sq ft of shopping centre floor space completed, including Westfield Stratford City in east London, meaning the total development pipeline has fallen by only 256,200 sq ft since October 2010.
This drop of 0.7 per cent is the lowest annual decline in the total shopping centre development pipeline in more than five years, and is a result of a number of mothballed projects being restarted.
Colliers expects that there will be little shopping centre development of significance in the next four to five years, but its Midsummer Retail Report published in July suggests that 2015 and onwards could see the return to the multimillion sq ft completion levels experienced at the beginning of the century.