Centre stage Glasgow prides itself on the quality of its retail offer, but are the city council’s planning policies able to protect it? Stacey Meadwell reports
When a 750,000 sq ft extension to the Silverburn shopping centre four miles from Glasgow city centre got planning permission five years ago, there were murmurs of disapproval. Questions were asked about the council’s policy of allowing further out-of-town retail schemes and the effect they would have on the city centre.
The issue has arisen again following the publication of Glasgow council’s report last month on the future of retail planning policy.
Glasgow prides itself on the strength of it city-centre retail. It is second in Experian’s retail rankings and the only centre outside London to be one of the top 20 European centres. This puts it in a strong negotiating position when new retail concepts and retailers arrive in the UK.
But there are concerns that its position will be challenged, not only by out-of-town centres but also by other UK cities as they develop modern retail schemes.
The report suggested the council might be turning its focus back toward protecting the city centre, and the local press claimed the council was effectively considering a moratorium on new out-of-town retail schemes.
Since then, however, the council has granted planning permission for 270,000 sq ft of retail at the edge-of-town Glasgow Harbour as part of a mixed-use regeneration project (see map).
Potential effect
So, just what is the council’s policy on retail development outside the city centre, and has it – as some in the market believe – shut the stable door after the horse has bolted?
The council’s report assessed the potential effect of new and planned retail schemes outside the city centre. It identified 1.9m sq ft of retail space, although only a small amount of that has been completed. The report also found that, if all these schemes were to go ahead, they could corner 11% of the city-centre spend.
Bill Potts, Glasgow’s city plan project manager, believes that this conclusion would be easy to swallow if the economy were booming, but not during a recession.
Referring to the new city plan that the council is due to adopt next month, Potts says: “Because we know about these retail opportunities, we want to take a precautionary approach to anything new that comes forward.
“We want to have some major development in the city centre, and allow schemes to get established before others come on.” He adds that to say there is a ban on out-of-town development is “very harsh”.
Most of the city’s retail agents believe the council’s new attitude towards out-of-town retail is maybe too little, too late.
Gary Mappin, regional senior director and director of planning, development and regeneration at GVA Grimley, says: “The pressures on the city centre aren’t ever going to go away, which is why the council had the report done. If you strip out St Enoch’s extension [see below], which wasn’t a massive development, you’ve got the expansion of Buchanan Galleries, but that isn’t happening in the short term.”
Indeed, the extension to the Buchanan Galleries is a tricky and expensive project that involves building over both Queen Street station to the east and the bus station to the north. Owners Henderson Global Investors and Land Securities give 2014 as an opening date.
In the meantime, the effects of the recession are evident. “There are signs of some fraying at the edges of the retail pitch,” says John Menzies, director at Cushman & Wakefield. “The Z shape of the retail pitch is reducing, with vacancies increasing in Sauchiehall Street.”
According to Savills, the prime pitch of Buchanan Street has maintained its headline rentals of £260 per sq ft zone A, but rents on Sauchiehall Street and Argyle Street, which create the horizontal bars on the Z, have come under pressure.
Value retail
Ross Allardice, retail director at Savills, says: “There is no doubt that St Enoch will rejuvenate Argyle Street in the short term.
“However, for this to be sustained, it is crucial for landlords to take a long-term view regarding the tenant mix.
“This will also be paramount to the revival of Sauchiehall Street, which needs to adapt to the changing demands of the market by focusing on more non-fashion, value-led pitches that will complement rather than compete with the surrounding retail area.”
He adds, however, that the council will need to allow change of use from retail to banks and leisure use.
As Menzies says: “It is clear that, in line with the national picture, demand has dropped. And, because Glasgow has become so popular, a lot of the brands are already satisfied. Now it is all about the new brands who want two or three shops, and for them, maintaining the city’s position in the retail rankings is key.”
Glasgow Harbour
Size 270,000 sq ft
Owner Peel Holdings
Developers Glasgow Harbour and Clyde Properties
Opening Not announced
Notes Part of a mixed-use regeneration project to the west of the city centre. Glasgow City Council granted planning permission this month but plans are now with Scottish Executive.
Buchanan Galleries
Size 590,000 sq ft (John Lewis anchor)
Opened 1999
Owners Henderson Global Investors and Land Securities
Notes A reserved matters planning application for an extension that will nearly double the size of the centre is expected next year. Land assembly is continuing, and completion is chalked in for 2014. Marks & Spencer will move in as second anchor.
St Enoch
Size 1m sq ft (including 250,000 sq ft extension under way)
Opened 1989
Owner Ivanhoe Cambridge
Notes Extension and refurbishment work is continuing and will open in phases. Hamleys has taken a store which it opened this week. There is further opportunity to expand the centre eastwards.
Princes Square
Size 100,000 sq ft
Opened 1987
Owner Redevco
Notes Centre has positioned itself with luxury retailers and food offer.
Forge Shopping Centre and Retail Park
Size 1m sq ft including retail park and multiplex cinema
Opened 1988 (refurbished 2008)
Owner Belfast Office Properties (shopping centre), Rock Investments (retail park)
Notes Planning permission for a 107,000 sq ft reconfiguration and extension of the retail park granted in June. Rock Investments is in administration.
Silverburn
Size 1m sq ft including 750,000 sq ft extension
Opened 1979 (extension 2007)
Owner Lloyds Banking Group forced Retail Property Group to sell the centre. Hammerson is currently frontrunner to buy it.
Notes Outstanding planning permission for a further 50,000 sq ft of retail space.
Braehead
Size 818,000 (shopping centre), 260,000 sq ft (retail park)
Opened 1999 and 2000
Owner Capital Shopping Centres
Notes Sainsbury’s has relocated and opened in the former B&Q unit outside the centre. Sainsbury’s former 80,000 sq ft unit is under offer, with Primark’s name linked to the deal, but not confirmed.
Glasgow Fort
Size 391,000 sq ft
Opened 2004
Owner Hercules Unit Trust and Pillar Property Group
Notes Planning approved by Glasgow City Council and Scottish Executive for a 175,000 sq ft extension. Marks & Spencer to anchor but has put expansion plans on hold.
Toy story: attracting the right tenants
Selfridges opening in Glasgow city centre remains many a shopping fashionista’s dream but, for those Glaswegians who like toys, games and gadgets, the dream store became a reality this week when Hamleys opened its doors.
The toy store chose to locate its second shop outside London in the £100m extension to Ivanhoe Cambridge’s St Enoch centre.
The St Enoch extension and Hamleys is together probably the biggest retailing story in the city centre since Buchanan Galleries threw open its doors 10 years ago.
Ivanhoe Cambridge has demolished a quarter of the 1980s centre to make space for a new entrance on the corner of Argyll Street and Buchanan Street, refurbished the remaining existing space and added a further 250,000 sq ft.
The centre is 80% let by floorspace, and will continue to open in phases until final completion next summer.
Richard Kingston, director at Ivanhoe Cambridge, says deals have had to be adapted to the tough market conditions. “We’ve had to be realistic, but key still is attracting the right tenant,” he says.
The right tenants include H&M, Swatch, Folli Follie and Lambretta – all of them signed up as part of the strategy to move the centre’s tenant mix to one that is more about fashion than budget retail.
Kingston says rental aspirations on new deals have been met and sometimes exceeded, but acknowledges that tenants have needed more help with fit-out costs via rent-free periods and cash contributions.
There is room for St Enoch to expand further eastwards along Argyll Street, but Kingston says plans will depend on market conditions.
Market at a glance
Prime rents maintained in Buchanan Street at £260 per sq ft
The previous high on Sauchiehall Street was £165 per sq ft, but this is under pressure
St Enoch’s extension will open in phases. Hamleys and H&M opened this week
Top rents at St Enoch are £165 per sq ft
Hammerson is the frontrunner to buy Silverburn Shopping Centre in a sale that was forced by Lloyds Banking Group
Sources: Cushman & Wakefield, Savills
