Shopping centres spring up as spending turns down

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The Independent Online

Nearly 20 million square feet of land is to be converted into shopping centres across Britain, despite a slide in consumer spending.

The UK boasts a total pipeline containing 1.762 million square metres (19 million sq ft), consisting of both new schemes and extensions to existing centres, says property services firm Cushman & Wakefield. These are due to open by the end of 2007 and represent a jump of nearly 13 per cent on 2005.

Across Europe, only Russia has a stores pipeline with more in it - 1.858 million square metres.

The UK has enjoyed a consumer boom in recent years as shoppers, buoyed by low interest rates and full employment, went on a spending spree. But now many retailers are complaining of far tougher conditions as high levels of personal debt and increases in the cost of borrowing have curtailed spending habits. Sales and profits at various shops have suffered as a result, with the likes of Clinton Cards and HMV issuing gloomy updates.

There has also been growing criticism of large shopping centres in out-of-town locations hitting trade at small, independent shops and killing the high street.

However, Mark McVicar, a partner in Cushman & Wakefield's development consultancy, said the dozens of centres currently being developed ranged in scale and included a large number of far smaller, town-centre schemes.

"In just about every town and city, the relevant council is looking to make improvements. There's less risk going in-town and the Government is encouraging councils to get their acts together and bring forward investment in town centres."

Cushman & Wakefield also revealed that the combined European total of new space is set to grow by 9 per cent this year, to more than 8.3 million square metres - the largest jump since the firm first starting monitoring shopping centre developments in 1960.

"We are not only seeing growth in the emerging markets towards the eastern fringes of Europe, but also in the more mature retail markets where developers are seeking to offer retailers and consumers better quality retail space and greater- choice," said John Strachan, the global head of retail at Cushman & Wakefield.

However, concerns still remain that developers could struggle to fill new centres if the consumer spending downturn continues.

The growing popularity of online shopping could also have an impact.