It has been a long time coming, but on 12 November shoppers in Newport will finally be able to step foot inside a gleaming £100m, 390,000 sq ft shopping centre. Queensberry Real Estate is opening its much-anticipated Friars Walk scheme, anchored by a 95,000 sq ft Debenhams and eight-screen Cineworld, on schedule and 85% let.
The scheme, which aims to almost double Newport’s catchment population from 206,000 to 411,000, is one of just four UK shopping centres to open in 2015.
Friars Walk’s 12 restaurant units are fully let to the likes of Wagamama, Las Iguanas, Chiquito and Loungers, while Queensberry is confident the remainder of the retail space will be let and trading by the end of February.
“With H&M, Next, River Island and Mothercare and the like, we’ve pretty much got all the retailers we wanted,” says Queensberry’s commercial director, Stuart Harris. “If you’d told us two years ago that we’d have only three or four units left, we’d have been very pleased after taking the scheme on at such a tough starting point.”
When Queensberry embarked on delivering Friars Walk, it took on a considerable mantle. Modus’s plans to revive the city with a 475,000 sq ft shopping mall fell by the wayside in 2009 when the property developer went into administration. The scuppered scheme was just one chapter in the grim history of a city centre retail market left on the sidelines.
“Debenhams was trying to find a way into the city centre back in the 1980s and it has taken 30 years to accommodate it,” says Western Retail’s Stephen Jones. “While city centre schemes failed to be delivered, a number of consents were given to out-of-town retail projects surrounding Newport. The recession then hit, which proved the final nail in the coffin. The city just fell off a cliff.”
Newport has since haemorrhaged retail spend. As well as losing out to nearby out-of-town retail schemes, it has leaked spend to the new town of Cwmbran to the north with its shopping centre and generous free parking. Local shoppers are also happy to venture further afield to visit Bristol, Cribbs Causeway and of course Cardiff’s 1.4m sq ft mall, the St David’s shopping centre.
In February, Colliers named Newport the worst-performing UK retail location, with rents falling by almost 80% between 2008 and 2014. “There was a complete collapse in confidence,” says Colliers’ Dan Simms. A long list of retailers including Marks & Spencer and Next abandoned the city centre altogether. “Suddenly, renewal rentals on the prime pitch of Commercial Street dropped from £100,000 to £25,000,” he adds.
Queensberry chief executive Paul Sargent is pragmatic. “We knew we were entering a city that had dropped to a very low base and the fact that it was so under-traded just made it more appealing for a regeneration specialist like us.”
As well as securing council funding to make the scheme viable, Queensberry incorporated a clause in the agreement stipulating that if it didn’t secure Debenhams as its anchor store within six months the developer would have the option of pulling the plug.
“It was difficult to get retailers to buy into the idea of Newport at first and we had to challenge perceptions, but over time it has got easier,” says Huw Thomas, director of Friars Walk’s letting agent, Cooke & Arkwright.
Queensberry’s Harris admits there had to be some softer deals done at the outset, yet recent deals have pushed zone A rentals over the £100 per sq ft barrier, and rents are edging closer to the £140 per sq ft headline Newport was achieving at its peak.
The prospect of staking a claim in a city forecast to jump from 171st to 77th in the retail rankings will certainly have helped secure lettings, as will the target of attracting 10m to 12m visitors a year.
Alongside improvements in retail, other investments promise to widen Newport’s appeal. The city is now home to a new University of Wales campus, insurance giant Admiral has brought 1,200 new jobs to the city, and the new M4 relief road will eventually improve connectivity via a bridge over the River Usk.
“The general sentiment is that, after hitting a very low point, Newport is on its way up,” says Alder King’s Owen Young. “Retailers won’t want to miss the opportunity to get in there to boost their brands and play their part in the city’s revival.”
Sprucing up newport’s traditional retail pitch
Once the final units are let at the Leslie Jones-designed Friars Walk, the longer-term challenge for Wales’s third-largest city is managing the fortunes of the traditional retail pitch.
Commercial Street and High Street have been a sorry sight in recent years thanks to the blight of vacant shop units. The arrival of a 390,000 sq ft shopping centre might on the face of it threaten to create further casualties, yet the increased city centre footfall will provide a welcome boost.
Queensberry has acquired a stake in the nearby Kingsway Shopping Centre in the belief that Friars Walk will improve its prospects. Recent lettings to Pure Gym and Sainsbury’s are seen as early indications that the two centres could work in synergy.
Although at least some of the traditional retail pitch’s shops are likely to be converted to alternative use, there are signs its fortunes are starting to improve. “There are still a lot of voids to fill on Commercial Street, but it will bounce back and you’d expect to see some decent rental growth,” says Savills’ Peter Clayton.
Agents are reporting an upturn in enquiries from retailers looking to benefit from a surge of new city centre shoppers and good news stories are finally filtering through.
On Commercial Street, for instance, family-owned department store Wildings has just undergone a £140,000 refurbishment, while the old Marks & Spencer unit has finally been let to Sports Direct.
Richard Hayward Properties attracted the retailer after redeveloping Olympia House and adding three new retail units. The developer is investing further in the city in order to attract a greater range of retailers.
“We’re talking to a US hedge fund about converting an office block in the heart of town and creating 15 retail units,” says director Richard Hayward. “There is a place for more specialist retailers in the centre and things are looking very positive.”
He adds: “Friars Walk will help bring more people in to shop. We’re confident we’ll find people to occupy shops and the city centre will go from strength to strength.”
A conventional offering
Securing a £60m convention centre will help Newport up the ante and steal a march on Cardiff as a centre for business tourism.
In June, Newport city council granted full planning approval for Celtic Manor Resort’s Wales International Convention Centre. Construction of the 320,000 sq ft centre will begin in the new year with completion scheduled for 2018.
Celtic Manor Resort, which hosted the September 2014 Nato summit, is owned by billionaire Sir Terry Matthews. It hopes the convention centre, which, with a capacity for 4,000 delegates will be the largest facility of its kind in Wales and South West England, will attract a range of international events.
Cardiff had planned to build its own convention centre, but now that Newport has pipped it to the post, largely thanks to match-funding from the Welsh government, the capital has been forced to rethink.
It is now focusing its attention on an events arena and is reviewing three potential sites across the city.
A Cardiff council spokesman says: “The proposed convention centre at the Celtic Manor will be an excellent facility for the city region. Cardiff intends to complement this facility – also for the benefit of the city region – by delivering a multi-purpose arena, with the aim of attracting first-class sporting and entertainment events to the Welsh capital.”
