CENTROS, the retail developer and one of the UK's leading urban regeneration and mixed-use property development companies, has pulled out of a deal to build a £50 million shopping centre in Dumfries town centre.
The decision is a big blow to Dumfries and Galloway Council, which had high hopes for the creation of a 200,000sq ft shopping precinct that would be a major step forward in its Whitesands regeneration area and create a link to the high street. Debenh
ams had been touted as the anchor tenant.
The deal was announced last August but a lot has happened since then in the property market – and Dumfries is having to pay the price.
The deal was done by Centros Miller, the Miller part being the Edinburgh-based Miller Developments. Then in January, Centros's owner, the London-based Delancey, bought out the Miller part to become 100 per cent owner.
Now Dumfries has been shelved, says Centros, until the investment market has stabilised and the end value is more certain.
Centros's chief executive, Richard Wise, said: "We will retain our ownerships in Dumfries as we still feel the town offers a good regeneration opportunity for the council, the local community and prospective retailers.
"However, capital values have moved significantly and until the market settles down it is difficult to be sure about the scheme's viability."
Roger Grant, chairman of the council's planning, housing and environment services committee, said the news was hugely disappointing for the town and the region.
He said: "This development was exciting and visionary and would have gone a long way to revitalising the town centre. Centros has agreed to meet formally with the council to explain the background and reasons for their decision at the earliest opportunity.
"Meanwhile, we must not forget that there has been a lot of good work put in by both sides that can be taken forward.
"The proposal was always dependent on the private sector response to the lead provided by the council and that remains the same."
One man who is not surprised at the Dumfries decision is Tim Appleton, CBRE's Scottish regional head of retail and development.
He said it was part of the nervousness in the sector but it was probably a one-off decision because the plans were ambitious for a town of the size of Dumfries, which probably already has as much as it needs.
He said: "You need a key anchor to make it work and they probably couldn't afford to do it. We know that Debenhams do not come cheap. You don't get a great rent from them and you have to pay a large capital contribution and if you don't open on a specific time there are huge penalties against the landlord.
"In the last few weeks Debenhams have put on hold a number of new schemes in Scotland and Northern Ireland and I am not surprised that they have shelved this one. You need a key tenant in position – you are not going to speculatively build it.
"I think Debenhams have put this one on hold. It does not stack up."
Debenhams, meanwhile, is said to be in "advance negotiations" with a view to being the anchor tenant at the proposed 70,000sq ft retail development at Springfield East in Elgin, a development by Elphinstone and Property Investment Partnerships.
It is said to have its eyes on 10,000sq ft. Planning permission is expected by June and the developers are said to be in discussion with a number of other retailers.
The full article contains 595 words and appears in The Scotsman newspaper.
