Developers set timetable for £600m shopping centre

editorial image
0
Have your say

PROPERTY developer Hammerson this week indicated that it planned to start construction of the long-delayed Sevenstone retail quarter in Sheffield city centre in 2013.

The £600m project, designed to radically reshape the area between Barkers Pool, Pinstone Street and Moorhead, is scheduled for completion by 2016, according to the company’s six-month report to shareholders.

It will have the same footprint as originally planned and the minimum of 60,500 sq metres of retail and leisure space, scaled down from 80,000 sq metres.

“Obviously, the economic climate has changed, but we are confident about the retail market for Sheffield city centre,” said chief investment officer Peter Cole.

“It is effectively the same development area, but slightly less intensive.”

The council, which has been working with Hammerson for 11 years, took heart from Hammerson’s public announcement that the overall development agreement had been signed and the declared scale of the scheme and timetable for construction.

After years of delays caused by the recession, it was being interpreted as a bullish response.

Sheffield and the 106,000 sq metres Eastgate Quarters scheme in Leeds were the only two UK schemes listed under Hammerson’s longer-term UK programme.

While there are still hurdles to be overcome in Sheffield, it looks likely that the programme will accelerate with a view to shops being open for either Easter or Christmas 2016, traditionally the times of the year that retailers target for launches.

A revised planning application is expected in the first half of next year.

Chief executive David Atkins said: “We have a new development agreement with Sheffield City Council for Sevenstone, a retail-led city centre development, and now have control of the development land.

“Sevenstone has outline planning consent, some of the buildings within the scheme have detailed consent and we are working closely with principal stakeholders, such as John Lewis, to progress the project.

“The current scheme comprises 60,500m² of retail and leisure accommodation and 2,500 car parking spaces.”

Essentially, the core remains a range of large modern shops that analysts say Sheffield lacks, although a sprinkling of restaurants is also envisaged.

Existing city centre retailers such as Next are understood to be looking for much bigger units.

Talks reflecting the new economic climate continue between Hammerson and John Lewis, with the retailer still thought to be weighing up the commercial advantages of relocating to the site of the former Fitzwilliam Street fire station, the original option, or redeveloping the existing department store.

In general, the London-based company is looking at ways of scaling back costs. For example, is thought to have dropped the idea of a large underground servicing area off Charter Square.

Meanwhile, a programme to complete the compulsory purchase of remaining land and properties is gaining momentum.

More than three-quarters of the site is already in “safe hands” – either Hammerson’s, the council’s, the Government’s Homes and Communities Agency’s or John Lewis’s – although there are still 100 leases and sub-leases to be acquired.

Hammerson’s results for the six months to the end of June showed profit before tax down by 42.6% at £192.8m, although like-for-like net rental income grew by 3.9%, with occupancy rates for group schemes ahead of its 97% target at 97.2%.

Mr Atkins said: “Our regionally dominant shopping centres and convenient retail parks are trading ahead of national benchmarks and continue to attract successful retailers.

“Despite a challenging retail backdrop in both our markets, we have seen little impact from the recent rise in UK retail administrations.”