by Jeremy Smither
The Channel Tunnel is due to open in the spring of 1993, hard on the heels of the creation of the single European market in 1992. Together, these two events threaten to bring about important changes in shopping patterns in southern England and northern France. This article, based on a paper given at a recent International Business Communications Conference, looks at the implications and opportunities for retail developers and investors which will arise on both sides of the Channel.
Current retail provision
Kent has four major regional centres — Maidstone, Chatham, Canterbury and Tunbridge Wells. According to Hillier Parker Research, the first three have grown significantly in importance over the last 25 years, largely at the expense of the fourth, along with the smaller towns in the area. In particular, the trio’s fortunes have been boosted by a series of retail developments opened in their centres, such as the Marlowes Arcade in Canterbury, which comprises a large British Home Stores and an attractive covered mall.
Meanwhile, other towns, particularly those on the eastern coast, have fared rather less well. Margate has struggled to hold its own, while Ramsgate and Folkestone, Gravesend and Sittingbourne have all declined in importance.
However, those small towns which have kept pace with their larger rivals in terms of new development have been successful. Town & City Properties’ and Pearl Assurance’s scheme in Ashford, for example, which comprises 28 new shops and an extension to Sainsbury, has attracted a range of national multiple and regional retailers. Similarly, Tonbridge improved following a joint Sainsbury and Bentalls development which provides a new retail anchor and has acted as a catalyst for two smaller schemes.
Town centres of northern France, by comparison, have seen little development over the past 30 years. Indeed, the only new schemes have been hypermarkets and out-of-town centres, such as the new Leclerc Commercial Centre outside Boulogne and the Mammouth hypermarket and shopping mall west of Calais.
There are some recent signs of improvement such as the newly opened Fraismarche in Calais, but, however, the town’s down-market image gives it less chance of revival than the more attractive, speciality-orientated Boulogne.
The regional centre is Lille, where recent pedestrianisation has further improved an attractive and varied retail environment. But the prime pitch is small, with few opportunities for extension, and as a result there has been little new development apart from a few small speciality centres such as the Galerie de l’Opera.
Mega centres
Construction of the Channel Tunnel has brought with it the prospect of “mega” shopping centres serving catchments covering parts of both England and France as well as Channel Tunnel passengers. But where will such schemes be located, and what are their chances of success?
Kent
The prospects for such a shopping scheme in Kent are not good. Land is expensive, planning is tight, and Government incentives few and far between. More importantly, there must be a question mark over demand in any one location.
Travellers coming through the tunnel by car will be deposited at Cheriton, just outside Folkestone, and it has been argued that this would be a good location for a new shopping centre. Folkestone’s town centre will certainly not be able to cope with any major growth in the number of shoppers for which it caters — but few passengers visit the town anyway. Most will either travel straight through Kent to London, or will move on to more attractive tourist centres such as Canterbury. There will undoubtedly be potential for retail at the terminal, but not, in my opinion a “mega” shopping centre.
Foot passengers will stop at Ashford, and it is here that the major increase in shopping space may be appropriate, not because Ashford is likely to attract many shoppers coming through the tunnel but because it will become a nodal point for development in Kent. New service and distribution industries will be drawn to the town, while the new high-speed rail link will make it more attractive to commuters. The town’s population will increase, and so will its ratio of high-spending A, B and C1 socio-economic groups. If there is to be a new “mega” centre in Kent the logical location must be in or close to Ashford.
The situation is more clear cut in the Pas de Calais. The area will be dramatically and rapidly regenerated by an influx of industry attracted by the greatly improved communications and generous government grants. It has been estimated that around Calais some 50,000 jobs will be created within a few years of the tunnel opening. This means considerable growth in retail spending power in the area, which Calais alone will not be able to service. So, even without the trade which may result from passengers travelling through the tunnel, the Calais region will soon be able to support one large out-of-town shopping centre plus further retail warehousing development.
Paris-London
When considering the potential traffic in “cross-channel” shoppers, it is important to bear in mind the proximity of London and Paris. With a journey time between them of under three hours, Oxford Street, Bond Street, Knightsbridge and Covent Garden and the Rue de Rivoli, Boulevard Hausmann and the Boulevard St Germain are likely to be magnets encouraging shoppers to leap-frog both Kent and the Pas de Calais.
This fact could, however, have implications for retail development in both capital cities. Shopping centres at railway stations have been proved a success by Heron Corporation’s Victoria Tunnel terminals to be built at King’s Cross and Waterloo have considerable potential for major developments.
Plans are at an early stage, but the King’s Cross proposals include an airport-type terminal complete with over 400,000 sq ft of retail, while at Waterloo the redevelopment of the South Bank Arts complex would include significant retail and catering elements.
Schemes in the pipeline
Even without the influence of the tunnel the retail development picture in Kent is very active. There are currently eight town-centre schemes of over 50,000 sq ft in the pipeline, including MEPC’s 250,000-sq ft scheme in Tunbridge Wells, Speyhawk’s 400,000-sq ft Priory Meadow in Hastings, and three in Ashford (Henry Lax and the Ashford Cattle Market Co have outline permission for 300,000 sq ft, Asda is awaiting an appeal decision on a 65,000-sq ft superstore, as is Northern England Development Associates for phase one of a 600-acre mixed scheme which will include retail).
And there has been considerable interest in further development, particularly out of town. Kent is the subject of some 3m sq ft of planning applications for out-of-town centres and retail parks, including two of over 500,000 sq ft: Hewitts Farm near the M25, which was recently refused on appeal, and Blue Water Park retail and leisure scheme outside Dartford, where the appeal decision is still awaited. However, the Secretary of State for the Environment recently released modifications to the Kent structure plan which stated that out-of-town shopping will be permitted only in exceptional circumstances.
With so much already in the pipeline, opportunities for new town-centre schemes must be limited. However, developer interest in potential shop redevelopment sites remains strong. Sevenoaks council will soon be offering a site for an 80,000-sq ft shopping scheme and apparently already has a long list of interested parties. The same situation would apply in most other town-centre sites.
Lille, on the other hand, has always been regarded as the crossroads of north-west Europe and this will be enhanced when it becomes the junction for the TGV from Brussels to Paris and London. Plans have been drawn up for a business centre on the 2,000-acre site next to the TGV station to include offices, hotels and retail.
Investment opportunities in Northern France are more numerous because of the lack of development, the more relaxed planning system, and relatively cheap land compared with Kent. However, I suspect that too many retail developments will be built over a relatively short period, not all of which will be successful.
Investment guidelines
The Channel Tunnel will have a major impact on all aspects of life in Kent, possibly to the detriment of its environment, but to its benefit in other ways including retailing. But there will be winners and losers.
Ashford seems set to receive the lion’s share of growth and as a result should be a pretty safe bet for retail investment so long as the location is good, although there may be some danger of oversupply in the short term.
As the tourist capital of the region, Canterbury must be further enhanced by the influx of tourists through the Channel Tunnel, and there might be an opportunity for an edge- or out-of-town scheme, although it would probably be resisted by the local authority.
A poor location coupled with an unattractive town centre and the prospect of losing 6,000 dock-related jobs makes Dover unattractive to investors. The council has been trying to promote a town-centre scheme for some years, but the lack of developer interest reflects attitudes towards the town.
Folkestone is currently enjoying a short-term boost, owing to the 10,000 construction-related jobs created by the tunnel. It is difficult to predict what impact the tunnel will have on the town, but a good level of demand from retailers for the prime pitch is an indication of confidence in its future.
Bypassed by the new motorway and rail system, the east of Kent has a more questionable future. Ramsgate is the second largest Channel port for freight, but most of this traffic will transfer to the tunnel. Perhaps the best hope for this corner of Kent will be that it becomes a backwater, increasing its attractiveness as a holiday area.
Northern France
For northern France, the tunnel will act as a catalyst for regeneration. New jobs and wealth are bound to have a beneficial impact on town centres and bring opportunities for new shopping developments throughout the area.
Conclusion
The tunnel will undoubtedly generate a considerable increase in the flow of people between France and the Uk both for day and longer trips. This traffic, coupled with the economic growth that the tunnel will engender, means that there are exciting opportunities ahead on the retailing front, particularly for developers and retailers with the foresight and flexibility to cope with the differences in style and culture.
