Regeneration plans for Newport have been dealt a serious blow as three key developments planned around the Ryder Cup 2010 have come unstuck. Liz Morrell asks what hope remains for the city’s retail revival.
Driving down the M4 into the Welsh city of Newport, one of the first landmarks you see is the Celtic Manor Resort – home to the Ryder Cup in 2010.
Newport is going through a major regeneration process and last year was promising three retail developments, coupled with extensive residential and hotel offers – all of which were originally due to coincide with its hosting of the flagship event of the golf calendar. Newport had high hopes.
Now, however, the timetable is in tatters, with one development abandoned, another on hold and a refurbishment complete but lacking tenants.
The so-called City Spires development was to have included 85,000 sq ft (7,895 sq m) of retail and leisure, and a residential tower of more than 200 apartments on the site of the Cambrian Centre. The hoardings that are still up promise “A vision to inspire”. That vision now seems a little blurred. Developer Modus has ditched the City Spires project after its bias to residential became unworkable in the present climate. Leasing director Nigel Poad says: “The market has changed. It would be commercial madness to press ahead with a scheme based on a residential content.”
Now Modus is planning to refurbish the existing Cambrian Centre – which would comprise about 15 retail units – with a new food store anchor and refurbishment of an upper floor that had been vacated ready for development. However, no timescale has been given and the refurbishment is likely to be no more than a superficial tidy-up only in case other opportunities for the site arise – such as office or budget hotel accommodation. “We are looking at an interim refurbishment but anything we do will be on the basis of having an eye on future development further down the line,” says Poad.
Modus is also stalling on its second development – the much-heralded Friars Walk, which is to be built in place of John Frost Square. Work was to have begun in March next year, but the site has a 20-year history of attempted redevelopment and has hit funding problems. “It’s the best planned scheme that’s not on site yet,” says John Burrows, chief executive of urban regeneration company Newport Unlimited.
Poad insists Friars Walk is “still very much on the cards”. He adds: “There is a scheme there and if we could secure the funding to build it we would. We have hit the most difficult finance market we have seen and as such nobody is out there to lend the money.”
The upshot is that the development has been reworked. “We have looked at certain elements and there was quite a lot of residential. We have looked to significantly downscale to the point there may possibly be none,” he says.
But Poad is confident Friars Walk will get built. “We believe that’s a temporary state of the market. Liquidity will have to come back and we hope that will come back in some point in the new year,” he says.
Burrows hints there may be other ways to finance the scheme. “We are still pursuing with Modus a few ideas for bringing in money earlier or to start doing parts of the scheme that need to be done earlier,” he says.
In the meantime Modus plans to be as prepared as possible. Poad says: “We are carrying on with the development process so when the market comes back we have something that is rock solid. We still believe if we can get the funding in place in the first half of next year we could be open and trading by autumn 2011.” If delays continue, Newport Unlimited is considering options such as landscaping the site and general beautification of the city ahead of 2010.
Lettings are continuing for Friars Walk, with 72.5 per cent of floorspace already exchanged or in legals. Joining anchors Marks & Spencer and Debenhams are River Island, New Look, Boots, JJB Sports and Republic – most of whom are upsizing from existing units in the city’s present prime pitch on Commercial Street. “New Look has got a 7,000 sq ft (650 sq m) store and will now take 30,000 sq ft (2,790 sq m), while M&S is doubling the trading footage – that’s a huge benefit for the city centre,” says Poad.
And although retailers will move out of the existing prime pitch, Poad insists that will simply make way for other retailers. Primark, for instance, has not yet signed to the Friars Walk scheme but does have a requirement for bigger space, so in theory could take the old M&S unit on Commercial Street.
The new scheme would also revamp the city’s restaurant offer – introducing names such as Nando’s and Pizza Express. “That’s why it’s so frustrating – without the credit crunch I’m certain this would have happened. We had senior debt offers in place and they required a certain level of pre-let, which we have well exceeded,” says Poad.
Despite the problems, Poad insists Modus will deliver. “We are too far down the line to give up,” he says. “It’s not a development that’s flying a kite – this is a development that is needed.”
But the truth remains that to date the only part of the retail renaissance completed in Newport ahead of 2010 is the£30 million refurbishment and remodelling of the 202,995 sq ft (18,860 sq m) Kingsway Shopping Centre by UBS Global Asset Management’s UBS Triton Property Fund, which was completed in October. Designed by Colman Architects, the redesign has created an additional 25,000 sq ft (2,320 sq m) of retail space and the installation of a glazed roof over Bridge Square.
The circa 50-store centre now comprises a 55,000 sq ft (5,110 sq m) Wilkinson anchor store that opened last Christmas, a 12,000 sq ft (1,115 sq m) prime unit fronting John Frost Square, two 6,000 sq ft (555 sq m) two-level units, a seating area for two cafés provided by the glazed roof and a new facade.
Peacocks has also just signed for a store at Kingsway. Peacocks director of retail operations Chris Miles says Newport has always been a successful trading location. “Because of this, we continued to trade through the disruption in the town centre. We feel the town has a bright future and we now wish to have an even stronger presence within the catchment area,” he says.
Asset manager Chester Properties says negotiations with a number of other tenants are continuing. However, its agents had been holding off aggressively marketing the centre in the hope that the adjoining Friars Walk development would be in a position to help improve the calibre of tenant taking space. As a result more than half of the units in the scheme are still to be let. “Work started in 2005/06 and retailers started to decant in 2006. Kingsway now needs to repopulate the centre with new tenants,” says Burrows.
The Kingsway Centre includes a new 1,050-space multi-storey car park that will be completed next September, serving Kingsway and the rest of the city. There are plans to expand its capacity at a later date to serve Friars Walk. “That will be the biggest car park in the city and will be a footfall driver for our centre,” says Richard Criss, senior partner at Capital Retail, a letting agent for the Kingsway Centre.
However, the Friars Walk delays means the Kingsway Centre can’t afford to wait any longer. “We are a value centre at the moment,” says Criss. “Modus came along with a Debenhams- and M&S- anchored scheme, which sits right on our doorstep and feeds into us, so we thought we can capitalise on that. We reworked our proposal, increasing the MSUs, and thought we would be able to get a slightly different retail audience given the Modus scheme would have given us a new profile.”
Now it seems the Kingsway Centre will retain its value-driven offer while Friars Walk will deliver modern units to the mainstream high street multiples. And despite the delays, experts are still confident Newport will get its long-awaited modern retail offer. “The people of Newport want better shops but it has fallen behind neighbours such as Cardiff and Bristol,” says Burrows. “We could get more out of our catchment area than we currently do.”
“Newport is catching up. It’s a great opportunity to pull back the shopper,” agrees Poad. But that is clearly some way off yet.
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Newport may still be waiting for its retail revamp but elsewhere in Wales and the Southwest, other cities are well under way. In September, the£500 million Cabot Circus opened its doors in Bristol. Developed by the Bristol Alliance – a partnership between Land Securities and Hammerson – the scheme, which includes 120 new stores, 15 major flagship stores and is anchored by House of Fraser and Harvey Nichols, brought more than 75 new retailers to Bristol and attracted more than 2 million shoppers in its first month. Fashion brands Crew, Oakley, Principles and Oasis have opened post-launch and fashion brand Guess, Guess Accessories, jeweller Agenda and beauty products retailer Rituals will all open by Christmas.
In neighbouring Bath, Multi Development UK, in partnership with Aviva Investors and Bath & North East Somerset council, is working on the£360 million SouthGate scheme, which involves the redevelopment of 9 acres in the heart of Bath. It will consist of 56 prime retail units – including H&M and Boots – anchored by a 125,000 sq ft (11,610 sq m) Debenhams. Excavation of the site was completed in November and it will open next autumn.
In Cardiff work is also well under way on the extension to the St David’s Centre. St David’s 2, developed by Land Securities and Capital Shopping Centres, will open next autumn. It will be home to Wales’ first John Lewis – the largest outside of London’s Oxford Street – as well as nine large units and 93 other stores. It has also already attracted the likes of Radley, Ghost, Links of London and All Saints. More than half of the space is now signed.