The developer behind an established major retail scheme is always expected to get shirty when another scheme appears nearby and threatens to steal footfall from the original.
Understandably, this leads to objections, counter-claims and fears over competition.
This is the situation in Cardiff. Developer number one is the giant Land Securities. For the past four years it has been nurturing a 1m sq ft extension to the city’s existing 430,000 sq ft St David’s shopping centre. The mixed-use scheme includes a new “iconic” library, offices, residential, leisure and 750,000 sq ft of retail. John Lewis is on board as the 240,000 sq ft anchor.
The rival is Capital & Regional. The London-based developer has plans to build a 450,000 sq ft retail park two miles from the city centre at Leckwith. The site, which is expected to get full permission in April, is next to Cardiff City Football Club which is owned by Sam Hamman – the man who helped develop Wimbledon FC’s fortunes in the mid-1980s. Money raised from selling the land to C&R will help to build a new 30,000-seat football stadium for the club.
On paper, it seems that there should not be any conflict. LandSec’s St David’s 2 is an in-town scheme, anchored by one of the UK’s leading retailers. C&R’s is out-of-town, anchored by traditional out-of-town retailers Matalan and Costco. Indeed, neither LandSec nor Capital & Regional want to be seen to be stirring up any controversy.
Peter Cleary, head of LandSec’s retail development team, emphasises that “complementary retailing, not competing retailing” is always welcome. His approach is echoed by Martin Barber, chief executive of C&R. But local agents and Cardiff city-centre retailers are still expressing some concerns about overlaps that could see complementary schemes running into competition with each other.
The issues include the terms of Leckwith’s consent, and the fact that C&R’s scheme will be finished a good two years ahead of St David’s 2. Questions are also being raised about how the council is dealing with the disposal of its land at Leckwith.
Leckwith’s consent for bulky goods was granted by the council in August 2003. The recent furore has been caused by C&R getting on board as retail developer at the same time as several of the proposed occupiers submitting planning applications at the end of December 2004.
LandSec lodged an immediate objection to the Leckwith scheme last December. However, this was withdrawn when LandSec was satisfied that the proposed Leckwith retailers would not compete against those associated with St David’s 2.
But, with city-centre companies such as Boots having already expressed an interest in the out-of-town scheme, critics still retain concerns that consent could be changed to open A1, which would allow for consumer goods.
“The main concern is if the Leckwith consent was widened further, because then it would compete with the St David’s Partnership,” states Robert Hales at EJ Hales, LandSec’s agents on St David’s 2 with Lunson Mitchenall and Cushman & Wakefield Healey & Baker.
Cardiff council has not given any guarantee this will not happen. Emyr Evans, corporate director for Cardiff council says, while it is “extremely unlikely” any consent of that nature would be granted, “you should never say never”.
C&R’s holding fund, The Junction, which will develop Leckwith, refused to comment to EG on whether the fund would look for further consent.
Leckwith gets the jump on St David’s 2
One of the attractions of Leckwith for high street retailers is that the scheme will be completed at least two years before St David’s 2. C&R’s Barber estimates that construction will start on site in May, with completion in 18 months, meaning Leckwith could be open in Christmas 2006. St David’s 2 is due to open in 2009.
The gap could also work in Leckwith’s favour as it would be building up customer loyalty. Cardiff town centre manager Paul Williams says there may be a large window between the developments, but he is confident the different retail offers will still prove attractive to shoppers.
Leckwith will be providing much-needed park-and-ride facilities which will service the city centre. Evans says Cardiff City FC has agreed to finance the park-and-ride, which would run at an initial loss for three years.
When asked if this would mean that shoppers would be more tempted to stay and shop at Leckwith, the council’s Evans says “that’s where control of the car park and getting people to the city centre comes into play”.
Could all this bring about a Swansea situation? Wales’ second city is dominated by two out-of-town schemes – Forest Fach, Centros Miller and Capital & Regional’s Morfa Retail Park – and its city centre is said to have suffered as a result.
But the council and Williams are adamant there is no such danger. “Swansea is not like Cardiff,” says Evans. “Cardiff has had numerous out-of-town schemes which have been promoted by the council. Swansea city centre, conversely, is now in dire straits.”
Williams says he knows that the Next at Morfa Retail Park is trading better than the Swansea city-centre branch. “Swansea’s out-of-town schemes are diluting the city centre,” adds Williams.
One final twist to the tale is that the land for Leckwith has been sold to C&R. Some agents have said the council has given the site away for nothing, and this has not been helped by Cardiff council having made no secret of its desire for a new football stadium.
However, Evans says nothing unusual is going on and that the retail site at Leckwith has been sold by the council to C&R, with capital receipt from that land sale going into an account that will be managed by the council.
However, Evans adds: “It is true that land, on which the new stadium will be built, will be leased to the club on peppercorn rates for 125 years. It will be a notional rate.”
From sport to residential
Evans says that the current stadium ground will be sold for housing: “It’s a complex arrangement designed so yields for land disposal will go into new developments.”
LandSec’s Cleary could not be drawn on Cardiff council’s decision, but says he does not feel let down about the decision to put retail into Leckwith. “We understand that Cardiff council is ambitious for its city, so we are keen to applaud that,” he says.
Cleary is happy to point out that St David’s 2 is still on course. LandSec secured planning approval from the Welsh Assembly last June, and this January a meeting of the full Cardiff council approved heads of terms and the use of compulsory purchase orders to gather the rest of the site together.
Hamman and his executive team have until April to convince Cardiff council of the project’s viability, but commentators believe Leckwith is certain to happen in April.
Says Nick Carter, senior associate of King Sturge: “If both schemes go ahead, they will create over 1m sq ft of retail space, which is a lot for a city like Cardiff to have.” Then it will be down to LandSec and C&R to prove they are complementary.
