Research from Strutt & Parker has shown that in the last six months there has been a 60% increase in the amount of committed shopping centre development in the UK, with a total of 5.1m sq ft under construction.

In October 2014, Strutt & Parker’s findings highlighted that only six proposals were poised to deliver new schemes in the next three years with no further developments committed beyond that. Since then developers have ‘pushed the button’ on three more schemes which will provide an additional 1.9m sq ft of retail and leisure space. This means that there are now a total of nine shopping centres underway in the UK; however there are still no commitments from any developers to deliver new centres after 2017.

The three additional shopping centres now in the pipeline include Bond Street in Chelmsford (300,000 sq ft) slated for completion in 2016 and Westgate Centre in Oxford (800,000 sq ft) and Town Centre, Bracknell (800,000 sq ft) which will both be completed in 2017.

The amount of space scheduled for completion in 2017 now totals 2.9m sq ft which represents an increase of 123% from what was committed in October 2014. 2017 will deliver the largest amount of new space since 2008 when a total of 12.1m sq ft was constructed.

Rob Williams, head of retail agency and development at Strutt & Parker, said: “The downturn meant that a number of developers who were committed to delivering new schemes either postponed construction or scaled back the plans; a number of these are now being revived, albeit with some adjustments. Developers are now looking at different approaches, not only in terms of size and tenant mix but funding. Very few, if any, schemes are being undertaken on the traditional trader developer / funder model with most now being undertaken by long term holders or using debt finance. Public sector and local authority support has also been an invaluable option for some schemes and has certainly been fundamental in getting the likes of Friars Walk, Newport and The Crescent, Hinckley and Bracknell Town Centre off the ground.”

Strutt & Parker has identified five centres which are due to open their doors in 2015: Flemingate in Beverley; The Crescent in Hinckley; Friars Walk in Newport, Grand Central in Birmingham and Westfield Bradford. This is the highest number of centres to be completed in one year since 2009 and they will deliver a total of 1.9m sq ft. Whilst the number of shopping centres that are being delivered is reverting back to historical levels the amount of space they provide isn’t. The five shopping centres that were completed in 2009 totalled 2.6m sq ft, providing 27% more space than the five being delivered in 2015.

Rob Williams concludes: “Seeing an increase of 60% in the committed development pipeline within a six month timeframe is certainly encouraging. The way in which we shop has altered dramatically and the new wave of development is embracing this and providing an end product that differs from the traditional model. Despite the three centres due for completion in 2017 all being of substantial size in general there has been a move towards ‘right sizing’ retail developments to accord with market conditions

“In the top 25 towns and cities rents are generally increasing and we have also seen voids levels fall in the prime retailing areas in the 25 – 100 rankings which should lead to rental growth returning. This should lead to developers and their funding partners being more confident of starting on site and committing to new developments, especially in prime locations. There is certainly the opportunity for less risk adverse funding sources to take advantage whilst there is still value in the market.”