The pace of UK shopping centre development remains sluggish with just 500,340 sq ft of space added in the first half of this year and is set to worsen, according to research by Cushman & Wakefield.
The only significant shopping centre to open in the first half of the year was Sovereign Land, Area Property Partners and Shepherd Construction’s Trinity Walk scheme in Wakefield, which started trading in May.
The opening of the 1.9m sq ft Westfield Stratford last Tuesday will account for 81% of the pipeline for the second half of this year, which will bring the projected 2011 completion total to nearly 2.8m sq ft.
The total anticipated completion is 12% higher than the 2010 level, but is skewed by the Westfield opening.
On 1 July total shopping centre floorspace in the UK stood at nearly 16.5m sq m across 698 schemes.
The 2012 pipeline currently stands at just under 200,000 sq ft, which will be the lowest annual increase in retail space since the 1950s. This comes after the 570,000 sq ft Tesco scheme in West Bromwich was delayed until 2013.
Activity is expected to pick up in 2013 with the scheduled opening of the 1m sq ft Trinity Leeds development, and a handful of other schemes under construction.
Toby Sykes, a partner in the retail services team at Cushman & Wakefield, said: “We predict an upswing in development activity towards 2015. The key for developers is not to oversupply and to ensure that new space is designed to meet specific retailer requirements.
“The strength of the casual dining market is also providing landlords with the opportunity of extending and improving catering facilities within their centres to increase shopping hours and pedestrian flow.”
Investment transactions totalled nearly £3bn in the first half of 2011, up 32% on the previous six months, and up 129% on the corresponding period for 2010. A total of 30 schemes were sold, including five over £100m. But these figures are again skewed by by Capital Shopping Centres’ £1.6bn purchase of the Trafford Centre in January.