South Coast Metropole South Coast Metropole - King Sturge

King Sturge: South Coast Metrolpole 2008
rather than a sustained downturn. Taking a view over
a longer term, total retail returns had comfortably
been in double-digits since 2002, prior to the sharp
correction in 2007. While a recovery may not be
imminent, it is likely to be on the medium- rather
than long-term horizon.
IKEA, the hugely successful Swedish furniture
retailer, has finally achieved planning permission for
a new site on the former Pirelli site in Southampton.
The centrally located site adjoining West Quay
Shopping Centre will provide 891 car-parking
spaces, and follows an unsuccessful attempt to
redevelop the Calor/Dimplex site in Millbrook Road.
The new 31,200 m² store on four levels will include
a 600-cover restaurant and, in line with other similar
stores in the UK, will draw in customers from a
very wide hinterland. Traffic chaos is guaranteed,
and will make car journeys into the city, especially
near Christmas when the football club is playing at
home, a challenge for even the most patient driver.
have had their value sharply adjusted to reflect
the current economic situation. However, most
commentators conclude that the market has now
corrected itself, perhaps too much, and there are
plenty of bargains out there for cash purchasers.
Parkridge have started to acquire retail investments
in the UK at post-credit-crunch prices and others
will follow. Helical Bernard Land Securities have
also announced they have £500 million to expand in
the sector. The UK market has a lot of positives: a
sophisticated offer in design and occupancy, and far
less risky than the troubled U.S market, or India and
China. The UK also provides greater transparency
and an easier legal system than some parts of
mainland Europe. The sector is likely to recover
well over the next two years, although recovery in
capital values will be led by an improvement in yield
against relatively flat rental growth.
West Quay Shopping Centre, Southampton
IKEA site, Southampton
A planning application by Sainsbury to build a
new 7,000 m² superstore in Portswood has been
rejected by the Secretary of Estate following a
public enquiry. Although the principle and size of
the store is accepted, the design is considered
inappropriate for the site. A revised application is
likely to be submitted later in 2008.
The credit crunch has certainly led to a correction
in the retail investment sector, with the value of
retail investments falling by between 10% to 20%.
Major schemes, such as British Land’s Meadowhall,
Parkridge have acquired the Bargate Shopping
Centre in Southampton from Derwent London for
£17.25 million. The purchaser also acquired Tudor
Arcade Shopping Centre in Dorchester for £14.75
million as part of a strategy to invest in the UK
retail sector. It is possible that the centre will be
redeveloped in due course.
Residential market review
The residential market is certainly slowing down,
both in terms of the number of transactions and the
value of stock, but is far from a state of collapse.
There are a number of dynamics influencing the
market in 2008/09.
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