The mix of brands at Union Square in Aberdeen and the relative wealth of the city will be key to its success, says Sara McCorquodale.

Within moments of the doors opening to Aberdeen’s Union Square shopping centre the first floor atrium was filled with people. An hour in, and footfall had topped 10,000 as eager customers queued to get into several of the new stores.

While heavy footfall on the first day is no guarantee of great trading three months down the line, it seems like despite the challenges of letting the scheme, it is a development that consumers have been waiting for.

Union Square is the realisation of a development first proposed in 1998. Covering 700,000 sq ft, it is the result of a £275m investment by Hammerson. Launched in the midst of a financial crisis, the venture may seem a risky one. But the calibre of its retailers and the wealth of the catchment suggest it is on course for success.

So far, 54 of the 67 retail units are let; 45 were ready to trade on the October 29 launch day. US chain Hollister’s decision to open its first Scottish store there next year is a particular coup for the scheme, as is the 7,093 sq ft space occupied by Apple. Its only other Scottish store is on Glasgow’s Buchanan Street.

Hammerson chief executive David Atkins says: “We will have all the units filled within the next 12 months and I am confident people are going to travel to shop at Union Square from as far as Glasgow and Edinburgh. Having Hollister is a case in point for this. People want cutting-edge labels and this is a global brand that is not available anywhere else in Scotland.

“The recession has been challenging and if given a choice we wouldn’t be opening the centre now. But Hammerson is a long-term investor.”

In terms of leases, the length and extent of rent-free offers has not been disclosed but Hammerson and leasing director Sheila King says the company has been “selective to get the right mix of retailers”.

Inevitably, given the climate, the developer has had to be flexible. Property sources claimed Boots negotiated a seven-year rent-free deal on a 10-year let. Zara was also allegedly offered a similar deal while Marks & Spencer is said to have been given a “significant amount of cash” before it opens at Christmas.

Lawyer Iain Macniven oversaw the leases for each unit let in the centre. The partner at Maclay Murray & Spens says: “Leases are between 10 and 15 years. Some of them have breaks - US retailers in particular are insistent on breaks. Deals are soft - they have to be in this climate, but it is a strong scheme.”

He continues: “Some retailers said they wouldn’t sign up unless they knew such-and-such a retailer was going for it. Initially, Zara wasn’t sure because it has been trading its socks off in Edinburgh and Glasgow.”

Like Atkins, Macniven has no doubts all of the units will be let swiftly. “Retailers want to wait and see what Christmas figures look like. But when you weigh up all of the positives about this scheme it makes sense,” he says.

Solid as a rock

Aside from the pull of the brands that have already taken space, there are other reasons to expect trade at Union Square will be solid. The centre is bordered by the city’s train station, bus station and harbour, making good transport links.

A new Jury’s Inn hotel adjoins Union Square, thus making it an ideal location - the tourist board hopes - for those seeking a shopping break.

The centre also has a 10-screen cinema and 12 restaurants and cafes - many of which are new to Aberdeen. The developers hope this will add to footfall.

As for competition, Union Square has several rival shopping centres to contend with. The Mall, formerly The Trinity Centre, on the city’s Union Street, counts Primark and Waterstone’s as tenants. But it lacks the gloss and leisure options characterising its latest rival.

The Academy in Belmont Street offers a range of designer brands while George Street centre Bon Accord has high street giants Next, John Lewis and Dorothy Perkins. St Nicholas Centre nearby also has Next, La Senza and M&S. Bon Accord and St Nicholas are undergoing a facelift, bringing in brands such as Kurt Geiger and Swarovski. The Land Securities and British Land-owned centres are also being regenerated through new flooring, lighting, fixtures and fittings to help them compete with Union Square.

But it is the geography of Union Square that may be its biggest challenge in changing shopping habits. While the centre resides in the lower streets of the city, its fellow retail developments are at least 10 minutes’ walk away, so customers may find themselves choosing between them. And it won’t necessarily benefit from the footfall that these older, more established centres around the Union Street area undoubtedly do.

However, these centres opened in the 1980s and 1990s and are aged in comparison. The centre’s glass-fronted construction sits comfortably in Aberdeen’s granite landscape, offering a modern shopping and leisure experience.

Other than convenience and competition, the demographics of Aberdeen suggest retailers have the opportunity to trade well. At £606 a week, the city has the highest average household income in Scotland due to the thriving oil and gas industry. The third largest city in the country, the unemployment rate is the lowest in Scotland at 2.1% and the city is home to two universities.

Lunson Mitchenall director Stuart Fyfe was one of the letting agents on the scheme. Originally from Aberdeen, he believes a development like Union Square is overdue. “You just have to look at the cars parked in the streets outside to see the amount of money in Aberdeen,” he says. “The shopping here has been inappropriate for the wealth in this city.”

Fyfe adds: “Getting retailers interested in this scheme has been no problem even though they are risk averse. People trading successfully in the city have gone down the route of having two stores in the city now. Others are just waiting to see how things go.”

Initial figures and reactions are positive. In the first four days, footfall of 630,000 was recorded.

Queuing to get into the Apple store, lawyer George Ibiso, 27, explained what he liked about the centre. “When you’re in London you see stores like Apple and wish they were here in Aberdeen, but they never have been,” he said. “I think this is one of the best things that has happened in this city for a long time. It’s really exciting.”

The centre also got the student vote, with 18-year-old Fiona Roy saying: “My friends and I are so chuffed we’ve got a Zara. It’s going to make a real difference as we’d have to go to Glasgow or Dundee otherwise, and that means spending more money and time to go shopping.”

Perth hospital radio presenter Diana MacIntyre, 69, says the access to transport appeals to her - as does the temperature. “It’s covered and considering how cold it can get up here that makes it much more comfortable. I like how easy it would be to come and do your shopping, especially if you’re a bit older. You can just jump off the train and you’re right here in the centre.”

Now open, the centre has to focus on continuing its initial success in the run-up to Christmas in order to fill the empty units. However, with a unique mix of retailers and a strong leisure component, Union Square is likely to flourish and be fully occupied in no time.