RETAILERS are still beating a path to the door of major shopping centre developments north of the Border despite the high street slowdown, according to one of the industry's biggest property firms.
Land Securities, whose £1.3 billion Scottish portfolio comprises eight key retail parks and shopping centres, claimed that a "wide variety" of names were "looking to associate themselves with strong retail locations".
The company pointed to rece
nt lettings at its Buchanan Galleries mall in Glasgow city centre, including deals with fashion chains Warehouse and Fred Perry, and the decision by Boots to extend its floorspace at Livingston's Almondvale shopping centre.
Meanwhile, The Elements – Land Securities' £130 million development linking Almondvale with Livingston Designer Outlet – has attracted River Island, mobile phone retailers Orange and 3, and restaurant operators Nando's, Wagamama and Ask.
Confirmation of the lettings came as Land Securities said the value of its office and retail assets, UK-wide, had fallen by 8.8 per cent to just under £13.6bn in the year to 31 March.
Regional portfolio manager Katherine Armstead admitted there had been a similar devaluation in Scotland, but said the group's expansion programme would continue. "We have a great opportunity to get the tenant mix right," she said. "There are retailers out there who want to acquire and still want to come into schemes.
"While shoppers may be cautious about spending in what is generally accepted as a tough market, I can't say we have seen that reflected in demand for our shopping centres."
Land Securities is currently working to double the size of the 600,000sq ft Buchanan Galleries scheme, with a detailed planning application for the £400m project to be submitted this autumn.
The Elements, which is scheduled to open on 16 October, will be anchored by Debenhams and Marks & Spencer, each occupying 90,000sq ft.
Lehman Brothers' property analyst Mike Prew described the results as "sturdy", with good underlying rental income cushioning the markdown in the value of the portfolio.
"(Land Securities] looks like a positive weather vane for the industry," Prew added.
However, the better-than-expected figures were offset by hefty falls in pre-tax profits and adjusted diluted net asset value – a key industry benchmark.
Land Securities chief executive Francis Salway said: "I think it's fair to say our results reflect what we've all known for some time – the property market has undergone a period of rapid repricing.
"It's no surprise our portfolio has fallen in value but what is the surprise is the fall has been limited to 8.8 per cent while the market as a whole fell by some 14 per cent (in the period]."
The full article contains 446 words and appears in The Scotsman newspaper.
