Several major retail schemes are being redrawn and rescheduled to suit the harsher economic conditions. By Elaine Cavanagh
Plans for anumber of town centre schemes in the north-west region of the M25 have been forced back to the drawing board by the recession.
Developers say they remain committed to their promised improvementsbut, with a fundamental rethink underway, a more cautious, phased approach to delivery is emerging.
This era of realism is typified by what is happening in Hatfield. St Modwen, which has been working with the local authority for some years on plans to rejuvenate the town’s seriously ailing centre, says it remains “a great opportunity”.
But the approved £100m retail-led, mixed-use scheme has been deemed economically unviable and is on hold.
Rupert Wood, regional manager for St Modwen, says: “We are determined to see if we can find a solution thatis realistic in terms of deliverability and viability.”
Chris Conway, director of strategy and development with Welwyn Hatfield council, stresses that none of the partners, which include the Homes and Communities Agency, have left the project.
He says: “We could be looking for something that can be delivered in phases. The original scheme was all integral – it was all or nothing. Now we need to see if we can respond to the market as it picks up – and ask ‘are there any early wins?’.”
The plans comprised a new town centre with 150,000 sq ft of retail, including 45 shops, cafés and restaurants, a bus interchange and 275 homes.
Working with architect Haskoll, the council is overseeing is an ongoing review between now and Christmas. There also be discussions with local businesses and stakeholders. Options will then be tested against a financial viability model. Conway says that, when a suitable alternative scheme has been identified, there will be further public consultation. It is hoped that a new planning application could be submitted as early as January.
It is unknown how much retail space will be delivered because, as Conway says: “We are not being fixed by numbers. Instead, we are looking at building blocks.”
Retailer Wilkinson, which signed up for a 28,000 sq ft store in the scheme, is still said to have a requirement in the town.Wood says: “If we find a solution that can be delivered, hopefully Wilkinson will be one of our main anchors.”
It is a similar story in Hemel Hempstead, where Thornfield Properties has been planning its £350m mixed-use Waterhouse Square development.
Economic conditions
Robert Hume, Thornfield project director, says: “Unfortunately, as with so many other regeneration schemes, our ability to progress has been hampered by the general economic conditions. We have had to go back to the drawing board in some respects to look at ways of simplifying the scheme.Our objective is to bring it forward in phases so that each one is viable.”
Changes could result in a slight reduction in the retail content. Thornfield had planned to build 160,000 sq ft, including a 110,000 sq ft food store. That is more than any occupier requirement in the market, says Hume, so it is being adjusted to 90,000 sq ft. A balance between other retail capacity and A3 uses is also being reviewed and could result in less space. Hestresses that this will not amount toa significant decrease.
Some of the residential element is being pushed back to a later stage, along with a shift towards a greater mix of housing types. A design rethink for the £25m performing arts venue is being undertaken.
Hume describes the process as “quite a dynamic one”. And some sense of timing is emerging.Thornfield hopes to agree terms with a food operator before the end of the year and start the planning process by spring 2010.
Plans for a scheme in Watford have not faced quite the same “back to square one”scenario as others in the region. However, the council has been seeking a new development partner for therefurbishment or redevelopment of the Charter Place shopping centre, after a long-standing agreement with Capital Shopping Centres fell through. Five candidates have now been shortlisted.
The local authority’s ambitions are being tempered by the same sense of realism that is hitting elsewhere. As Peter Mitchell, head of property atWatford council, says, the council is looking for a developer that can deliver a scheme rather than being overly prescriptive about the type of scheme. It is hoped that the preferred developer will be approved by December, and the scheme will be in the planning process within the next 12-18 months.
Meanwhile, what Mitchell describes as a “robust team” of advisers has been appointed, including agent Brasier Freeth, legal adviser Lovells and architect Benoy.
The council has shown its commitment to the scheme by paying £4m-plus for the former 46,000 sq ft Woolworths store, which links into the development area.
“It’s one of the biggest transactions in the town centre and an important element of land assembly,” saysMitchell.
Discussions are now taking place with a number of retailers. There are various permutations on the type of lease that may be agreed.
Whatever the outcome, Mark Poyner, consultant with Brasier Freeth, says that acquiring the Woolworths shop was seen as critical because it has given the council control over the tenant mix and letting strategy.
Galleria bags lettings
The Galleria outlet centre at Hatfield has had a healthy six to eight months in terms of letting activity, according to Deepan Khiroya, retail and hotels portfolio director at owner Land Securities.
The emphasis has been on introducing better-known brands to the mall, he says.
In August, Gap opened in a 7,500 sq ft shop, created from a combination of two empty units and one relocation of an existing tenant. There have also been deals with Jaeger, Nike and Gant.
Market at a glance
The Harlequin, Watford, is experiencing higher than normal void levels, with more than 10 units available, says Mark Poyner, consultant with Brasier Freeth.
The Hemel Hempstead market is “poor but not terrible”, says Mark Bunting, group director at Aitchison Rafferty. Rents in the Marlowes shopping centre have fallen from £65-£70 per sq ft to £55 per sq ft.
Hemel Hempstead has a glut of shops in the 1,500 sq ft-bracket on the market, says King Sturge retail partner Martin Crossley, which could slow down recovery.
Rents in some parts of St Albans have dropped by about 20%, says Bunting. Good secondary shops on Chequer Street have fallen from £110 per sq ft to £85 per sq ft. There are more vacancies, but not the flood of empty units that was feared.
