30 DATA


MALL DEVELOPMENT FALLS TO EARLY 1990S LEVELS The rate of shopping centre


construction activity has fallen to similar levels seen during the early 1990s recession, limiting opportunities for retailers to expand, according to the latest research from CB Richard Ellis. Shopping centre


development has fallen to less than 25 percent of levels recorded in the first half of 2007, immediately before the onset of the credit crisis, and continues to contract in Great Britain with new completions set to provide less than 3m sq ft of space in 2011. More than half the total


of new shopping centre space completed this year is accounted for by Westfield Stratford. However, unlike the early


1990s recession, when new scheme proposals and consent levels declined sharply, the overall development pipeline has remained relatively stable. The decline continues to be more to do with nominal delays than schemes being scrapped altogether, albeit ‘distressed’ schemes – those where developers are in administration or cannot progress schemes for financing reasons – have


FOOTFALL INDEX July saw the Experian National Retail FootFall Index fall


by 2.2 per cent compared with the same month last year, following a pre-June pattern. The month-on-month rise of 1.6 per cent falls some way short of the typical increase for July - which normally achieves high volume of footfall due to the combination of the start of the school summer holidays, summer sales and consumers buying for planned vacations. However, this year the retailers started their summer sales early, potentially attracting shoppers into their stores during the month of June as opposed to July. The drop in footfall may also be a reflection of the


financial pressures faced by consumers whose pockets are being squeezed by high petrol, rising bills and food prices. Recent figures by the BRC (British Retail Consortium) however, show food price inflation slowed from 5.7 per cent in June to 5.2 per cent in July. This was mainly due to the spring heat wave producing extra UK grown crops and reducing the demand for imports and contributed to a price inflation reduction from 2.9 to 2.8 per cent.


A decline in consumers’ discretionary income is taking its toll on the retail sector as evidenced by the Nationwide Consumer Confidence Index and the Office for National Statistics (ONS) - which indicates that disposable income is 2.7 per cent lower than last year. This, coupled with the fact that consumers are focusing on paying off existing debts, means a general reluctance to spend on the big ticket items. The sectors that are most closely linked to the housing market have been hardest hit, particularly furniture, homewares, DIY and electrical retailers – a prime example being furniture chain Lombok which recently announced its plans to close half of its stores amidst tough trading conditions. The UK Retail Park Index shows an increase of 1.0 per cent in


July compared to July 2010. While the high street is suffering a disappointing performance, the Retail Park sector appears to have attracted more consumers this month. This may be down to the attractive combination of convenience and free parking – although the summer weather will have been a factor in encouraging


SHOPPING CENTRE August 2011 www.shopping-centre.co.uk


inevitably grown in number. Due to the length of time it


takes to get planning consents and the cost of holding land for development, it is clear that some shopping centre schemes will inevitably be cancelled resulting in further pipeline contraction. CBRE expect the current pipeline total of around 60m sq ft to fall to about 40m sq ft over the next three years. Mark Disney, shopping


centre development & leasing director, said: “Retailer demand is increasingly focused on larger shopping centres, but the lack


of new development is limiting opportunities. We are seeing strong demand for new space in schemes such as Westfield Stratford, but demand is also strong for space in established major shopping centres like Bluewater and Meadowhall. “The market is now gradually


adapting to developers’ requirements to see committed income before starting on-site. After the current hiatus, we expect a flow of new schemes will begin to be delivered to the market from 2015/2016 onwards.”


footfall to the sector. The next 12 months will present an interesting picture for


retailers as we count down to the London Olympics. It is hoped that this major event can boost spending in the economy and attract additional international tourists. The last Olympics had a positive impact on the fortunes of sporting retailers and according to data from Experian Hitwise, inspired consumers enough to make sport and fitness the fastest growing sectors for online visits.


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