Can a luxury-led retail scheme establish Leeds as the shopping capital of the North? Claire Robson assesses the impact of Hammerson’s £165m Victoria Gate
When Harvey Nichols opened in the Victoria Quarter of Leeds in 1996 the city earned the title “Knightsbridge of the North”. Some 20 years on, Hammerson plans to bolster Leeds’s upmarket offer with the opening of an adjoining centre, Victoria Gate.
Incorporating 575,000 sq ft of retail and leisure, Victoria Gate will be anchored by John Lewis and has already signed Anthropologie, Cos, & Other Stories, The White Company, Maje, Hackett, Gant and international restaurant group D&D.
John Lewis has taken possession of its store and Global Gaming Ventures will begin work on fitting out its new casino in April.
According to Hammerson’s development manager, James Hepburn, almost 70% of the space is either exchanged or in legals ahead of its October opening.
He says: “Of the 18 brands, 17 are new to the city. We have focused on targeting premium retailers not represented here and believe it can help Leeds become the premium retail destination for the North of England.”
When plans were announced, it was assumed Victoria Quarter tenants would upgrade to larger-sized units, but so far only The White Company has committed to moving. Hepburn says the lettings programme is ahead of expectations and remains confident the scheme will be more than 90% let on opening.
US fashion retailer Gant is the latest to have taken space at Victoria Gate. A spokesman says: “Leeds is perceived as an attractive location with a good catchment of premium/luxury brand consumers, it also has a buoyant student population for whom fashion is a key spending category.”
Hammerson would not reveal the rents it was achieving, although Hepburn says: “Victoria Quarter is at £280 per sq ft and we won’t be far off hitting that.”
Agents’ views on the scheme are mixed.
JLL’s Damian Sumner says: “It [Hammerson] is making a big effort to maintain a high line, but in truth I think it might struggle.”
JLL is agent on Land Securities’ Trinity Leeds, the 1m sq ft city centre mall which opened in 2013 and is almost fully let.
Although much of the retail in Trinity is mid-market, it has attracted the likes of Apple and Armani Exchange. Sumner says: “Premium retailers are tending to be more focused on Trinity and many of the luxury names are still focused on London and the South East.”
Yet others believe Hammerson has a winning strategy which will have a positive impact on the rest of the city.
“I think it [Victoria Gate] will open with a strong line-up of retailers,” says Savills’ Steve Henderson. “People may have expected a few more names to be announced, but it doesn’t mean discussions aren’t going well.”
He adds: “The scheme will boost footfall and complement rather than compete with Leeds’s other retail pitches.”
CBRE’s James Fox agrees: “The new space can only help the city and put the focus on Leeds. John Lewis is bound to have a halo effect and Victoria Gate’s parking will allow more shoppers to access the city centre by car.”
Leeds has a compact city centre and shoppers will be able to walk from Trinity to Victoria Gate in 10 minutes, increasing traffic along core retail streets.
Situated in the heart of the city’s’ retail core, Briggate is likely to benefit most from the increased traffic. It has bounced back well following the opening of Trinity, with a number of voids filled in recent months.
“Briggate has recently attracted the likes of Zara Home, Samsung and Lloyds Bank,” says Sanderson Weatherall’s Peter Heron.
He adds: “Commercial Street was initially hit hard, but today there is only one vacant unit and the likes of Hotter Shoes and Itsu have recently taken space on the street.”
Rents in Leeds were at £300 per sq ft pre-recession and those on Commercial Street fell to below £200 per sq ft in the wake of Trinity opening. It may take time to return to previous heights, but agents predict rents will be back to the mid £200s per sq ft within the next couple of years.
Hammerson’s Hepburn says: “Leeds is in prime position to jump up the retail rankings. Retail strategy consultant Javeline predicts the city will overtake Manchester due to the quality and range of its offer.”
Meanwhile, Experian places Leeds in seventh place in its retail rankings and Manchester third. Experian’s James Miller says: “Leeds’s population means it is not going to overtake Manchester, but Victoria Gate will help cement its position.”
Leeds has also experienced a boom in leisure lettings. Trinity responded to unprecedented demand by allocating a greater proportion of the scheme to leisure, and those who could not get in have located in surrounding streets.
Hammerson says three of its leisure units are under offer. Hepburn says: “We have had considerable interest and have had to be careful not to let hundreds of restaurant operators take over the retail space.”
Whatever happens at Victoria Gate, it is unlikely to dampen demand for other pitches.
Phase 2 dilemma
Hammerson is already pondering what to do with Victoria Gate’s second phase.
Once the new centre opens it will be left with an adjoining 15-acre site. The developer has consent for a 2,000-space car park but is now faced with the dilemma of what to place alongside it.
“With a large John Lewis we are confident there will be demand for more retail and leisure space and we are looking at how to get the right mix,” says Hammerson development manager James Hepburn.
He won’t rule out providing some office space, but thinks it is unlikely to be substantial given the scheme’s location outside of the office core.
He says there is potential for a large cinema, but many agents argue it would be difficult to justify. JLL’s Nick Ferris adds: “I am not sure Leeds can take another cinema with Vue at The Light, Everyman at Trinity and Showcase at Birstall.”
Broadway broadens appeal
After more than a decade in the making, Westfield’s Broadway Bradford is finally open, but what impact is it having?
The new 570,000 sq ft shopping centre opened last November and has been lauded a major success.
Anchored by Marks & Spencer, Debenhams and Next, the centre is home to 70 retail and leisure brands. By spring 2017 a new leisure extension will be complete, incorporating The Light cinema and four restaurants.
“We are 95% let with six retail units left,” says Renee Moran, asset manager at owner Meyer Bergman.
According to Moran, the scheme will boost footfall across the city centre by 40%, while spend is set to rise by 78%.
The long-term impact may be positive, but the opening of the centre has initially left a string of empty units across surrounding streets.
Lambert Smith Hampton’s Philip Clarkson cites a number of empty shops as a result of retailers relocating to the new scheme, including M&S and Topshop stores on Darley Street. He says: “Eventually the city centre will see the benefits of increased footfall, but it is going to take time.”
Hear from John Lewis’ Jeremy Collins and other Leeds business leaders at EG’s Leeds Question Time on 28 April.
