Scottish retail development stalls – GVA Grimley
GVA Grimley’s research on pipeline activity for the Scottish retail sector shows a total of 286 retail proposals in Scotland currently within the planning process, granted planning permission or under construction, compared with 208 proposals in the pipeline in mid-2009. In terms of floorspace, this increased level of pipeline activity equates to some 227,353 sq m of potential new retail floorspace, the firm notes.
However, the firm notes: “It is clear from the pipeline data that while the total level of floorspace within the pipeline has increased, particularly in terms of schemes benefiting from planning consent, the level of developments actually being delivered has reduced. This clearly reflects the levels of uncertainty being experienced by the retail sector.”
GVA Grimley says there remains a clear correlation between the size of a centre and the level of rents for prime retail space, with the larger centres achieving higher levels for prime properties. “When compared with rents in 2008, the recent recession has caused prime rents to drop across all Scottish towns by an average -18%”, it notes.
The Scottish government’s £60m Town Centre Regeneration Fund “represented a unique initiative to help assist town centres at this difficult time”, the firm says, and about 84% of the projects examined have been either completed or partly implemented to date. Feedback has suggested that the fund was less successful in terms of its ability to secure further spin-off investments in town centres through private-sector investment, it adds.
GVA Grimley says it is clear that some of the larger retail schemes in Scotland require more positive market conditions if they are to be implemented. “What government policy cannot directly create is demand for retail space, which ultimately drives the development appraisal case for the delivery of significant retail-led schemes. The availability of funding is creating a further hurdle to delivery,” the firm says.