Foreign Exchange

Although the United Kingdom's economy is suffering a marked downturn, new shopping centers equivalent in size to more than six Bluewaters will have opened in the UK by the end of 2008, according to Cushman & Wakefield's new UK Shopping Centre Development report. The annual figure of 945,000 square meters is the highest since the brokerage firm began keeping records in 1965 with the opening of the country’s first shopping centre in Elephant & Castle, London.

Despite the increase in space, the UK still lags behind a number of European countries in terms of space per head of population. The UK has 251 square meters of retail space per 1,000 people, which is higher than the EU-27 average of 201 square meters, but behind Norway, which has 636 square meters per 1,000 people.

The total figure for 2008 includes 560,000 square meters of new space and 385,000 square meters in the form of expansions and redevelopment. Westfield London and Liverpool One are the two largest shopping centers to have opened in 2008 at 150,000 square meters and 151,431 square meters, respectively. Both are now among the five largest shopping centers in the UK but are dwarfed by the MetroCentre in Gateshead, which is the country’s largest at 190,447 square meters. Earlier this year major projects also opened in Bristol with the 93,000-square-meter Cabot Circus and the 62,000-square-meter Highcross in Leicester.

There is currently 1.2 million square meters of new shopping space either under construction and due to open within the next 18 months or which has opened since July. The last shopping center opening peaks were in the late 1980s/early 1990s and in the mid-1970s. The difference this time, however, is that the majority of projects are in-town regeneration projects rather than out-of-town projects in the mold of Bluewater, Kent, which was the last such major project of its type in the UK.

Liverpool One, for example, is an open streetscape scheme integrated into the historic city centre which represents over £900m of largely private investment into the region. Similar but smaller scale schemes have also opened in the centers of cities such as Exeter and Canterbury.
If the liquidity crisis continues, development levels are likely to drop sharply after 2009 as schemes are postponed due to financial or funding issues.

"The strength of retailer demand is demonstrated by the successful letting of major centres such as Liverpool One and Westfield London," says Justin Taylor, head of shopping centre leasing for Cushman & Wakefield. "Retailers are thinking longer term and although the confidence of some has been knocked by the impact of the liquidity crisis on consumer spending, these large new shopping centres represent important strategic locations where they can expect to operate profitable stores."

Top 5 Largest Shopping Centers in the UK

Location	Name	Gross Leaseable Area (square meters)	Year Opened
Gateshead, Tyne and Wear	MetroCentre	190,447	1986
Dartford, Kent	Bluewater	153,285	1999
Liverpool	Liverpool One	151,431	2008
Manchester	Trafford Centre	150,928	1998
London	Westfield London	150,000	2008

Source: Cushman & Wakefield
 

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