A new report has revealed that a lot of UK shopping centres will never be built or expanded, even though planning permission has already been secured.
The cause is a difficult retail environment that has made such development unfeasible. An increase in online shopping and consequent decrease in high street traffic mean that the value of many centres would be exceeded by the cost of redeveloping or building them, according to Colliers International, the property consultancy that released the report. The report stated that over 10 million square feet of new shopping centres and expansions to existing ones that were originally scheduled to be built in the next three years will not be finished.
Mark Phillipson, Colliers head of retail, said that shopping centres usually take 10 to 20 years to construct, and many of them reached the build stage while the recession was in full swing. Although the economic environment is more stable than it was in 2008, he warned that the market was not yet robust enough to start producing brand new shopping centres. For that to happen, a long economic boom would be necessary.
The Colliers report arrives in the wake of the most prominent high-street failures on the UK high street in almost a decade. BHS recently announced that it would close after 88 years in business, resulting in the loss of 164 stores and 11,000 jobs.
ustin Reed, former menswear tailor whose clientele included dignitaries and celebrities, also closed. Analysts blame their demise on online competitors. Independent retail analyst Richard Hyman said that in the last 10 years, online commerce alone has added the virtual equivalent of 110 million square feet of commercial space, which amounts to the equivalent of 65 new Westfield London shopping centres. A growing supply of retailers with no corresponding increase in demand has resulted in a massive oversupply.