rtpi conference - october 2016 jc

RTPI Conferences is managed by Kaplan LPD on behalf of the Royal Town Planning Institute

Retail Trends: Fact and Fiction

James Child – Retail Research ManagerEGi Research / Estates Gazette


- RETAIL DEVELOPMENT TRENDS – TOWN CENTRE & OUT OF TOWN

- IMPACT OF NPPF ON RETAIL PLANNING – AN UPDATE.

- INVESTMENT & LEASING TRENDS – TOWN CENTRE & OUT OF TOWN.

- ADMINISTRATIONS 2016 – THE SCALE OF IMPACT.


RECENT HEADLINES


RETAIL DEVELOPMENT – TOWN CENTRE VS OUT OF TOWN

All Retail Schemes over 50,000 SQ FT & with 3 units or more.

Shopping Centres

Retail Parks

Shopping Parks

Factory Outlets

Town Centre Regeneration Schemes.


APPLICATION

PERMISSION

CONSTRUCTION

COMPLETION & OPENING

Even if the application is refused or withdrawn, we continue to monitor the scheme for additional applications or news.



APPLICATION

PERMISSION

CONSTRUCTION




RETAILERCOUNCILAGENTSDEVELOPER

COMPANY BULLETINSSOCIAL MEDIALOCAL PRESS

AGENTSCOUNCILRETAILER

LOCAL PRESSSOCIAL MEDIADEVELOPER

COMPANY BULLETINS


CENTRETOWN

RETAILDEVELOPMENT


MILLION6SQ FT6,135,708


2016 2017 2018 20190.0

1,000,000.0

2,000,000.0

3,000,000.0

4,000,000.0

5,000,000.0 Town Centre (Under Construction)

Town Centre (Permission)

MIL

LIO

N S

Q F

T O

F CO

MPL

ETIO

NS

PREDICTED TOWN CENTRE COMPLETIONS (sq ft) BASED ON CURRENT UC.

2.1M SQ FT

1.2M SQ FT

2.6M SQ FT

0.2M SQ FT


2016 2017 2018 20190.0

1,000,000.0

2,000,000.0

3,000,000.0

4,000,000.0



MIL

LIO

N S

Q F

T O

F CO

MPL

ETIO

NS

PREDICTED TOWN CENTRE COMPLETIONS (sq ft) BASED ON CURRENT UC + PPG

2.1M SQ FT

5.2M SQ FT

4.6M SQ FT

2.7M SQ FT


HISTORICAL & PREDICTED TOWN CENTRE COMPLETIONS (sq ft) BASED ON CURRENT UC + PPG

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 [ESTD]

2017 [ESTD]

2018 [ESTD]

2019 [ESTD]

0.0

2,000,000.0

4,000,000.0

6,000,000.0

8,000,000.0

10,000,000.0

12,000,000.0

14,000,000.0

MIL

LIO

N SQ

FT

OF

COM

PLET

IONS


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 [ESTD]

2017 [ESTD]

2018 [ESTD]

2019 [ESTD]

0.0

2,000,000.0

4,000,000.0

6,000,000.0

8,000,000.0

10,000,000.0

12,000,000.0

14,000,000.0

MIL

LIO

N SQ

FT

OF

COM

PLET

IONS

BOOM CRASH RECOVERY?

HISTORICAL & PREDICTED TOWN CENTRE COMPLETIONS (sq ft) BASED ON CURRENT UC + PPG


TOWNOUT OF

RETAIL DEVELOPMENT


MILLION2SQ FT1,857,478


PREDICTED OUT-OF-TOWN COMPLETIONS (sq ft) BASED ON CURRENT UC.

2016 2017 2018 20190.0

500,000.0

1,000,000.0

1,500,000.0

2,000,000.0

2,500,000.0

3,000,000.0

3,500,000.0

4,000,000.0

4,500,000.0

5,000,000.0

Out of Town (Under Construction)

Out of Town (Permission)

MIL

LIO

N SQ

FT

OF

COM

PLET

IONS

1.1M SQ FT

0.7M SQ FT


2016 2017 2018 20190.0

500,000.0

1,000,000.0

1,500,000.0

2,000,000.0

2,500,000.0

3,000,000.0

3,500,000.0

4,000,000.0

4,500,000.0

5,000,000.0

Out of Town (Under Construction)

Out of Town (Permission)

MIL

LIO

N SQ

FT

OF

COM

PLET

IONS

PREDICTED OUT-OF-TOWN COMPLETIONS (sq ft) BASED ON CURRENT UC + PPG.

1.1M SQ FT

4.6M SQ FT

0.9M SQ FT1.3M SQ FT


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 [ESTD

]

2017 [ESTD

]

2018 [ESTD

]

2019 [ESTD

]

0.0

2,000,000.0

4,000,000.0

6,000,000.0

8,000,000.0

10,000,000.0

12,000,000.0

14,000,000.0 Town Centre Out-of-Town

PREDICTED & HISTORIC COMPLETIONS (sq ft) BASED ON CURRENT U/C + PPG.


0.0

2,000,000.0

4,000,000.0

6,000,000.0

8,000,000.0

10,000,000.0

12,000,000.0

14,000,000.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 [ESTD]

2017 [ESTD]

2018 [ESTD]

2019 [ESTD]

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

PREDICTED & HISTORIC COMPLETIONS (sq ft) BASED ON CURRENT U/C + PPG.

If the OUT OF TOWN line goes above the TOWN CENTRE line… we should be concerned

that town centre first is not working as it should…


Last year we talked about CHANGE OF USE from A1 Retail to

other use types….

…Slight change this year – we’re looking at NEW BUILD projects in more detail – and how the proportion of Leisure (D2) space

within them is increasing…


% SHARE OF NEW BUILD

THAT IS

LEISURE (D2)


Estates Gazette Retail Supplement.

September 10th.Savills Blog, September 15th.


% SHARE OF NEW BUILD THAT IS LEISURE (D2)

Town Centre Out of Town

2004 – 2009

2010 – 2015

2016 – 2019

6% 4%

5%12%

6%14%


Out Of Towndevelopers don’t need to

attract punters

with a substantial LEISURE OFFER

Town Centredevelopers have to

attract punters

with a substantial LEISURE OFFER


APPLICATION

PERMISSION

CONSTRUCTION


ASSESSING THE IMPACT OF TOWN CENTRE FIRST (NPPF)


PRE-NPPF APPLICATIONS.SEPT 2007 – MARCH 2012

POST-NPPF APPLICATIONS.MARCH 2012 – SEPT 2016

33 TOWN

CENTRE

73 OUT OF TOWN

48 OUT OF TOWN

51 TOWN

CENTRE



2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

0

1

2

3

4

5

6

7

8

9

10

NUMBER OF OUT-OF-TOWN SCHEMES APPLIED FOR BY QUARTER

3736


OUT OF TOWN PRE-NPPF SCHEME STATUS

PERM W/DRAWNREFUSED NO DEC’N PERM REFUSED W/DRAWN NO DEC’N

OUT OF TOWN POST-NPPF SCHEME STATUS

4842 11 4 101 2 3

66% PERMISSION RATE.

88% PERMISSION RATE.Average time in the planning

system: 443 days.



OUT OF TOWN POST-NPPF SCHEME STATUS

PERM REFUSED W/DRAWN NO DEC’N

29 16

PERM W/DRAWNREFUSED NO DEC’N

TOWN CENTRE POST-NPPF SCHEME STATUS

2626 48 11 4 1029 2 2 0




15% REFUSAL RATE.

6% REFUSAL RATE.


PRE NPPF [SEPT 2007 – MARCH 2012]

Town Centre Permissions are now given 41% QUICKER. 360 DAYS 211 DAYS

Out-of-Town refusals now also come through QUICKER.

Out-of-Town Permissions also given QUICKER – only by 5 days. 336 DAYS 331 DAYS

359 DAYS 206 DAYS

POST NPPF [MARCH 2012 – SEPT 2016]



OUT OF TOWN PROPOSALS…

- More likely to “drift” without a decision.

- More likely to get refused altogether.

- Will take much longer to get through planning.

But, despite this…

…They are still coming through…

…Does the “Town Centre First” message need to be stronger…?



LEASING & INVESTMENT

TRENDS


-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

11.8 12.2

11.3

10.1 10.2 10.2 9.1

10.0

8.9 8.8

10.6 10.8 10.1

9.0 9.1 8.7 8.4 8.2 7.9 7.9

AVERAGE LEASE LENGTHS, TOWN CENTRE & OUT-OF-TOWN 2006-2016

2015

– 20

16

2006

– 20

0720

07 –

2008

2008

– 20

0920

09 –

2010

2010

– 20

1120

11 –

2012

2012

– 20

1320

13 –

2014

2014

– 20

15


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

17% 17% 22%30% 30% 33% 36% 38% 41% 41%

% LEASE LENGTHS BETWEEN 1 AND 5 YEARS IN TOWN CENTRES

2015

– 20

16

2006

– 20

0720

07 –

2008

2008

– 20

0920

09 –

2010

2010

– 20

1120

11 –

2012

2012

– 20

1320

13 –

2014

2014

– 20

15


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%15% 10% 15%

26% 25% 28% 34% 31% 36% 38%

% LEASE LENGTHS BETWEEN 1 AND 5 YEARS OUT OF TOWN

2015

– 20

16

2006

– 20

0720

07 –

2008

2008

– 20

0920

09 –

2010

2010

– 20

1120

11 –

2012

2012

– 20

1320

13 –

2014

2014

– 20

15


MORE MARKED


INCENTIVES SPLIT


-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

5.5

4.6

6.3 6.7 6.7

7.9

6.4 6.4 6.9

5.8

4.8

6.0 5.7

6.5 6.5 6.3 6.2 6.0 6.1 5.9

INCENTIVES (Months rent free at start of lease) TOWN CENTRE & OUT-OF-TOWN 2006-2016

2015

– 20

16

2006

– 20

0720

07 –

2008

2008

– 20

0920

09 –

2010

2010

– 20

1120

11 –

2012

2012

– 20

1320

13 –

2014

2014

– 20

15


INVESTMENTS SPLIT


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

23.4%30.2%

41.8% 39.9%23.3% 30.0%

22.8% 26.2% 25.5%32.3%

TOTAL RETAIL INVESTMENT SPLIT (Town Centre vs Out Of Town)

2015

– 20

16

2006

– 20

0720

07 –

2008

2008

– 20

0920

09 –

2010

2010

– 20

1120

11 –

2012

2012

– 20

1320

13 –

2014

2014

– 20

15


IMPACT OF BRAND ADMINISTRATIONS


IMPACT OF BRAND ADMINISTRATIONS

7.8 MILLION

SQ FT


7.8 MILLION

SQ FT

TOWN CENTRE:6.5 MILLION SQ FT

OUT-OF-TOWN:1.3 MILLION SQ FT

84% 16%


Estates Gazette Retail Supplement.September 10th.


TOWN CENTRE SPACE CLOSED OR PUT AT RISK DUE TO ADMINISTRATIONS/RESTRUCTURES H1 2016:

6.5 MILLION SQ FT…

…TOWN CENTRE SPACE COMPLETED AS PART OF MAJOR DEVELOPMENTS SINCE 2012:

6.1 MILLION SQ FT…


2016 2017 2018 20190.0

1,000,000.0

2,000,000.0

3,000,000.0

4,000,000.0



MIL

LIO

N S

Q F

T O

F CO

MPL

ETIO

NS

PREDICTED TOWN CENTRE COMPLETIONS (sq ft) BASED ON CURRENT UC + PPG

2.1M SQ FT

5.2M SQ FT

4.6M SQ FT

2.7M SQ FT


A FEW CONCLUSIONS

RISK OF OVERSUPPLY BEARING OUT AS A RESULT OF DEVELOPMENT AND TOWN CENTRE ADMINISTRATIONS.

INVESTMENT HAS DRIFTED MORE TOWARDS OOT LOCATIONS OVER THE LAST 12 MONTHS – SHORTER TERM LEASES AND FLEXIBILITY.

NPPF CONTINUING TO PROVIDE SOME PROTECTION TO TOWN CENTRES – BUT PERHAPS STRONGER MESSAGE NEEDED FOR T.C.F.

8 MILLION SQ FT UNDER CONSTRUCTION AT PRESENT – WITH MAJOR SCHEME PIPELINE SET TO PEAK NEXT YEAR.


Thanks For Listening.

All data copyright Estates Gazette Group. September 2015.

[email protected]

@JamesChildEGi

rtpi conference - october 2016 jc

Documents