Urban regeneration, a hot retailing concept in the United States for many a year, finally seems to be working its way into the United Kingdom shopping center sector.
Developers and investors have seen that co-operation with local authorities, retailers and each other is the key to in-town success, particularly as projects become increasingly complex. “There's a recognition thatis going to be happening in major city centers and is going to be increasingly complex. It has to be a more intricate approach and it will almost certainly be the case that you cannot separate the shopping center environment from the open-street scene. It will be a lot more difficult to spot the join,” says Brian Raggett, a senior director at CB Hillier Parker, the UK arm of property consultant CB Richard Ellis.
This has been most recognized in Birmingham, where the huge Bull Ring project in the heart of the city center is due to be delivered in September 2003. The $750 million development includes 1 million sq. ft. of urban-orientedspace, and is a significant part of the 2.5 million sq. ft. of total retail space under development that will radically alter the face of the Midlands city.
The Bull Ring project is led by The Birmingham Alliance, a joint venture between landowners Hammerson, Land Securities and Henderson Global Investors. Originally, the Birmingham City Council faced a major dilemma as the players pursued their own independent projects, threatening to spoil each other's schemes and any integrated approach in the city. However, in the end, they decided to pool their resources.
Liverpool is also another UK city planning its own urban facelift, demonstrating that developers are keen to take on the risk for the return in such major projects. A consortium led by UK developer Grosvenor Estate and backed by Henderson Global Investors is planning a $1 billion redevelopment of the Paradise Street area in the city center. The scheme, supported by Liverpool City Council, is threatened by plans for the adjacent Chavasse Park site but the city sees Grosvenor's plans as the best route for the regeneration of its retail offering.
“We didn't want a shopping center development. We wanted a development that was properly integrated,” says Alistair MacDonald, development manager of Liverpool Vision, a regeneration body for the city. “It is very much about respecting the city. We wanted a style of development that maybe big groups haven't been doing,”
With the type and scale of development being very new to many of the parties involved, city-center schemes will have to use more sophisticated forms of performance measurement to keep investors and retailers happy. “They need to look at using asset management such as applied to retail parks in terms of performance and make those available to all stakeholders,” says Raggett.
Andrea Carpenter is editor of London-based EuroProperty magazine.