Mystery shopping

It is well known that developer Chelsfield has been buying sites in central Newcastle. Yet agents are tight lipped. Noella Pio Kivlehan investigates The activities of developer Chelsfield in central Newcastle is proving to be something of a badly kept secret. Ask agents what the London-based group is up to and the question is met with a wall of caution and an obvious reluctance to talk. “I wouldn’t want to talk about it,” says one, while another adds that “it’s something that shouldn’t be discussed”. The agents’ shyness is strange, given it is well known that Chelsfield has acquired or is interested in sites on and off Pilgrim Street, in the centre of Newcastle, near the prime retail pitch of Northumberland Street. Chelsfield itself remains silent on its plans, but is said to have designs on securing sites from Swan House to New Bridge Street to develop a scheme thought to be more than 1m sq ft stretching across 9 acres. The area is dotted with rundown buildings. If it was developed for retail it would increase Newcastle’s prime retail space. Chelsfield started its acquisitions two years ago when it bought the Northern Electric block, which includes Carliol House on Pilgrim Street, and an NCP car park. The company is now said to be in talks with Morely Properties to buy Commercial Union House. There have been mixed reports as to whether this has gone through, with some agents saying it has not. If it has not yet happened, expectations are that Morely would be prepared to reach a deal with whoever becomes the dominant owner in the street. Continuing its acquisition, Chelsfield bought the Odeon Cinema, also on Pilgrim Street, from Helical Retail just six weeks ago. Helical had retained an option on the cinema that was due to expire in January, although agents didn’t expect the company to exercise it. A source in the city says that Odeon was talking to various parties about the property, which has been vacant for a while. Says the source: “Odeon was saying that it would negotiate with those who will offer £5m-plus.” A spokesman for Helical Retail says he could not comment on the price. Chelsfield and Morely will not comment on the situation. However, a spokeswoman for Newcastle city council confirms that Chelsfield is in discussions for other buildings on the east side of Pilgrim Street. “It is in discussions about a major retail development and it has asked the council to facilitate in that. We are actively discussing that and the council can see the benefits of an extension towards that part of the city. At the moment it’s all still up in the air and no applications have been launched. “We are very open minded in developing, that whole area of buildings – the Odeon, the fire station – which are a bit rundown.” One agent who did voice an opinion on properties in the area is Chesterton’s David Furniss, who says: “Either isolated buildings or a major scheme would be good for the city centre.” But he adds that assembling them will be a very expensive business, which is why he believes that nothing will happen in the area until at least 2005. When something does happen, he says: “It will most certainly be a retail-led development. It’s an opportunity to expand retail southwards and the town needs to supply the demand. There is the completion to the extension of Eldon Square, but it won’t provide a new anchor for the city.” Interest in the city Newcastle has probably the highest demand from retailers of any city in the UK. Mango and Zara are said to be knocking impatiently at the door, while big department stores such as Selfridges and House of Fraser are rumoured to be interested in the city. The problem is that the prime retail pitch is full and, while there is the £120m redevelopment planned for the centrally-based Eldon Square shopping centre, it is not considered enough. Given the benefits a potential retail scheme could have for Newcastle, perhaps the city’s agents should be prepared to shout about it a little louder. Selected retail requirements (central Newcastle) The city centre is short of prime retail space Retailer Speciality Size range (sq ft) Agent Allders Department store 70,000-150,000 Colliers Conrad Ritblat Erdman All Bar One Café/bar 5000-8,000 Bass Benetton Fashion 12,000-20,000 Hartnell Taylor Cook Cannons Leisure/sports 2,500-40,000 GVA Grimley Carrefour Express Leisure/sports 10,000-20,000 Harmer Ray Hoffbrand The Designer Room Fashion 10,000-30,000 Markham Vaughan Gillingham Habitat Homeware 15,000-25,000 Churston Heard Hackett Menswear 1,250-5,000 Harper Dennis Hobbs House of Fraser Department store 100,000-200,000 House of Fraser In-Wear Women’s wear 1,500-3,000 CWM Jaeger Women’s wear 1,500-6,000 Coats Lakeland Household accessories 4,000-6,000 Harmer Ray Hoffbrand Mappin & Webb Jewellers 140-1,500 Michael Peddar Monsoon Clothing, luggage, accessories 1,000-2,500 Monsoon Ocean Homeware 10,000-15,000 Gooch Cunliffe Whale Republic Men’s and women’s wear 2,000-3,000 Kenney Moore Selfridges Department store 150,000-250,000 Selfridges Zara Clothing 10,700-16,150 Harper Dennis Hobbs Source: Focus/Chesterton Newcastle leisure Developments are moving forward Newcastle’s retail market is under pressure from rising demand, but its leisure market has not been forgotten. One of its biggest leisure schemes, Land Securities’ £70m The Gate, will open in November. Anchored by a 12-screen Odeon multiplex, it has already signed up leisure operator Chorion’s Tiger Tiger, chargrill restaurant Ma Potter, and Noodle Bar. London-based pub Waxy O’Connor’s is said to be interested in taking a unit. “People are getting really excited about it now, especially as they can see the structure is almost complete,” says Ian Thurlbeck of Sanderson, Townend & Gilbert. Elsewhere, a restaurant quarter is being created at AWG Development’s Imperial Quay project, which has planning permission for 15,000 sq ft of restaurant space. Outside Newcastle, the £13m De Vere Village Hotel and Leisure Club – a joint venture between Highbridge Properties and the Ashall Group – opened in July at Cobalt Business Park. Retail sector – high street Doing well from high demand Location Address £ per sq ft Newcastle Northumberland Street 300 Eldon Square 300 Grainger St/Blackett St 160 Sunderland The Bridges 125 High Street 57 Middlesbrough Cleveland Centre 120 Linthorpe Road 120 Hill Street Centre 100 Captain Cook Square 75 Hartlepool Middleton Grange 75 Gateshead MetroCentre 335 Darlington Northgate 85 Cornmill Centre 70 Durham City Silver Street 100 Prince Bishops Shopping Centre 85 Source: Chesterton Retail sector – out of town Larger catchment areas mean higher rents Location Address £ per sq ft Newcastle Kingston Park 18 Silverlink 22 Sunderland Peel Centre 12 Middlesbrough Teesside RP 20 Gateshead Retail World 20 MetroCentre 18 Darlington Morton Park 10 Darlington RP 16.50 Durham City Arnison Centre 17.50 Source: Chesterton