Property Times European Shopping Centres 2010 Shift to value-add ...

Shopping centre: Existing stock and pipelineDevelopment versus redevelopment ofexisting shopping centresMany retail investors have identified the poor qualityof existing shopping centre stock, especially incountries with a long tradition of shopping centressuch as the UK, France and Germany.Redevelopment of existing old schemes has becomethe main focus of the major retail investors, who areconcentrating on increasing the income of theirassets whilst at the same time avoiding the risksassociated with new shopping centre openings. Thisredevelopment potential is estimated to apply to halfof the existing stock in France and Germany andrepresents 12 million sq m of GLA.In the UK, all major schemes (over 14,000 sq m)currently under construction are new-build schemes.These were conceived before 2008 and havegenerally managed to weather the recession well,given the consequent fall in supply of new space.They have, however, undergone significant redesignsas a result, as in the case of Parkway, Newbury andTrinity Walk, Wakefield. Redevelopment is beingconsidered only if there is a strong commercialrationale to do so. However, given the cost ofredevelopment often outweighs the uplift inachievable rental tones on the completeddevelopment, such redevelopment is not currently onthe agenda of most UK developers and investors.Box 4Redevelopment and refurbishment projectsrecently delivered in:UKThe Accord Centre, AberdeenLand Securities and BL200,000 sq ft extension (from 500,000 sq ft)completing in 2009St Davids 2, CardiffLand Secs / CSC450,000 sq ft extension to include a new JLP(1.4mn sq ft in total)Opened in 2009Eldon Square, NewcastleNew Debenhams store425,000 sq ft extension (1.4mn total)Completed in 2010Southgate, BathMulti DevelopmentRedevelopment – phase 3 opened last year,albeit not yet fully let.FranceVélizy 2,Unibail-Rodamco108,000 sq m – refurbished between 2005 and2007Parly 2,Unibail-Rodamco107,000 sq m –Refurbishment from September 2010 toSeptember 2011BeaugrenelleGécinaRedevelopment of 45,000 sq mReopening planned in 2013www.dtz.com 10