Cardiff’s Queen Street in late October has descended into half-term hell. Swarms of parents hauling or pushing pram-bound children fill almost every square inch of retail space. Any gaps are plugged by lounging teenagers. Navigating from one end to the other of the Queens Arcade is nothing short of manoeuvring through an assault course.
Apart from a test of patience, what the experience shows is just how vibrant the city’s retail area is. This is just as well, as there is another 2m sq ft of retail space planned for Cardiff, both in and out of town, which will be added to the existing 1m sq ft of retail. However, the customers may be out in force, but are they actually spending?
Not according to national figures. Statistics from the CBI show that retail spend in the UK in October had fallen for the eighth month running, with big names such as Next and John Lewis reporting drops in profits.
Earlier this month, Bob De Barr, director with Land Securities, whose company has a massive retail scheme planned for the city, added more woes to the industry. He stated at the British Council of Shopping Centres annual conference in Belfast that falling demand from retailers could leave much of the UK’s retail development pipeline redundant. Clearly, not a good sign for Cardiff.
The situation has prompted questions about the Welsh capital’s retail supply. Does it have too much retail space coming on line, and will all the schemes get built?
Agents have, for some time, bemoaned the lack of large floorplates in Cardiff. Now, in the year of its 100th anniversary as a city and 50th as Welsh capital, Cardiff is getting its birthday wish. At almost 1m sq ft of pure retail, St David’s 2 — being developed by Land Securities and Capital Shopping Centres under the guise of the St David’s Partnership — is on track to start next year and complete in 2009.
Robert Hales, of the scheme’s letting agent EJ Hales, says the Welsh Development Assembly is issuing compulsory purchase orders on behalf of the developers, and a public inquiry is expected to take place early next year.
But several commentators are worried about the amount of retail designated for St David’s 2. Being such a huge scheme with such an influential developer, no one in Cardiff wanted to go on record with negative comments. But one agent says the concern is whether there will be enough occupiers to fill the space. The agent believes major units now being completed or refurbished in Cardiff city centre before St David’s 2 opens will soak up any retail requirements.
These schemes include Scottish Widows’ 129,000 sq ft Queen Street scheme, where the final tenant, thought to be a major high street bank, is about to be signed up.
In addition, an extension to the front of Queens Arcade will provide more space. According to Chris Thomas, director of Hartnell Taylor Cook, and agent for the Widows scheme, New Look is moving into a 16,000 sq ft basement unit, while a tenant still has to be agreed for a prime front unit of 2,300 sq ft.
And then there is the old David Morgan building, sold by the Morgan family in January to Helical Bar for £29m. According to Nev Jones, retail estate partner with Eversheds, who acted on the deal, the family sold up because they feared competition from the St David’s 2 proposed anchor, John Lewis.
“The Morgan family were trading well, but they got out at a good time, and they got a good price,” says Jones. Helical Bar has already signed a retailer to the refurbished building, but it still has another 70,000 sq ft to let. Borders is considering taking space, while Helical Bar says it is close to agreeing terms with a fashion retailer, although it would not say which one.
The amount of space on the Cardiff market does not worry Peter Cleary, head of LandSec’s retail development team, and neither do the comments of his colleague Bob De Barr. Cleary believes the city has changed significantly over the past few years, and is moving from being a provincial city to an international one.
“We are providing the big floorplates retailers want, and we are seeing a lot of interest from retailers requiring 20,000-40,000 sq ft,” he says. At the time of EG going to press, John Lewis was only days from signing.
As for De Barr’s comment, Cleary says he was alluding to changes in lease structures, and that “at the moment, in a more generic sense, there is slight concern and nervousness in the market, but that’s not what we are experiencing at St David’s 2.”
Also dismissing concerns about too much retail is Bob Croydon, partner with King Sturge. He says that, when past schemes were built — such as the original St David’s Centre, and the 25-year-old Capitol Shopping Centre — everybody said the city would have too many shops, “but it never happened”.
The out-of-town retail market posesdifferent questions. Croydon’s colleague, associate Philip Williams, believes there is scope for other out-of-town schemes, “but I doubt there is demand, at least in the short term”.
Of concern to those in the city is the belief that there is already enough out-of-town retail, with Culverhouse Cross, the Cardiff Bay Retail Park and Valegate Retail Park all within a few miles of the city.
But this has not deterred retailers. The two main schemes, just on the edge of Cardiff city centre, are the 450,000 sq ft Leckwith project, and the 80-acre International Sports Village, which will include 285,000 sq ft of retail. Both are still in the planning stages, but they have already secured key retailers.
Capital & Regional’s Leckwith project comprises a new shopping destination, which will be built on land adjacent to a proposed new stadium for Cardiff City Football Club. It is the brainchild of Sam Hammam, the man who helped Wimbledon Football Club’s fortunes in the mid-1980s. The shopping element will help finance the much-wanted 30,000-seat football stadium.
Department store Costco says it will take a 135,000 sq ft flagship unit, while Tesco is hotly tipped to take the remaining space.
Around 285,000 sq ft of Cardiff council’s International Sports Village, upon which Taylor Woodrow Construction has begun work, will be retail. In June, supermarket chain Morrisons got permission to build an 83,000 sq ft store, while Toys R Us also announced in October that it would move out of the city centre to the site, to make way for the new St David’s 2 development.
The amount of out-of-town retail in the pipeline has prompted questions. For example, Gordon Lewis, director with the planning arm of consultant White, Young & Green, asks: “Are we going to saturate the west of Cardiff?”
The question is not only pertinent to the out-of-town developments, and the west of the city, but to the whole of Cardiff. Market commentators are asking whether all the proposed schemes will go ahead.
There has been speculation that Leckwith would not. LandSec’s Cleary says: “The momentum that Leckwith may have had 18 months ago has fallen away. Our understanding is that the priorities for the city are St David’s 2 and the International Sports Village.”
Cleary’s comments are understandable, given that Leckwith, which will be finished two years ahead of St David’s 2, could become a possible competitor if the council gives its units open A1 consent — a decision has not yet been reached. However, a C&R spokeswoman says the scheme will go ahead.
A Cardiff council spokeswoman says: “The council is still very much behind Leckwith, and the developers have until the end of the year to produce a business plan.” And Eversheds’ Jones says that two or three years ago he thought Leckwith was the most unlikely scheme to be developed. “Initially I thought it wouldn’t succeed because of where it is, but that has changed.”
Cleary need not worry. St David’s 2 is the one project that Cardiff commentators believe is the most likely to be built. “We are going to put all our chips on St David’s 2 and assure its success,” says King Sturge’s Croydon.
All the developments are being built on council-owned land, and it is likely the council will want all of them to go ahead — an argument being used in favour of each project. But councils have been wrong in the past, and only by actually building the schemes will people be proved right or wrong.In the meantime David Jones, director at White Young & Green, points out that: “Retail is essential use. It’s not going to go away. We just have to learn how to use it and to make sure that it is suitable for the city.”
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St David’s 2 The St David’s Partnership – a joint venture between Land Securities and Capital Shopping Centres – has detailed planning permission for the city-centre scheme, which will provide almost 1m sq ft of retail space. Along with the existing St David’s Centre, it will create more than 1.4m sq ft of retail space, and be anchored by a 260,000 sq ft John Lewis department store, together with 123 shops, restaurants, cafés and kiosks. The scheme will also provide public squares, a library and 400 apartments Leckwith Capital & Regional has outline planning permission to build 450,000 sq ft of retail space next to the new Cardiff City Football Club development, being planned by Sam Hammam. Costco has already signed up for a flagship store at the out-of-town scheme Cardiff International Sports Village The proposed 285,000 sq ft out-of-town retail development has detailed planning consent for 125,000 sq ft of space for Morrisons and Toys R Us, and for access roads, a swimming pool and leisure complex New or existing schemes under refurbishment David Morgan The 170,000 sq ft former city-centre department store on The Hayes was sold by the Morgan family for £29m to Helical Bar in January. Sports World, which trades from a 2,000 sq ft unit as Sports Scene, has signed to take 52,000 sq ft. Bookseller Borders is thought to be interested in taking around 48,000 sq ft. There is another 70,000 sq ft left to lease Queens Arcade The centre is getting a front extension. New Look is moving into a 16,000 sq ft basement unit, and a tenant still has to be agreed for a prime front unit of 2,300 sq ft Queen Street Scottish Widows’ 129,000 sq ft redevelopment of a prime part of Cardiff’s city-centre retail market is about to sign the last of its tenants, which is thought to be a major high street bank |
