Shop plan could be one of the last

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The Independent Online
BLUE CIRCLE is thought to be on the point of securing finance for one of Britain's largest shopping projects, a pounds 300m development near Dartford, Kent.

But if the Bluewater scheme goes ahead it is likely to be one of the last of its kind.

New planning guidance from the Department of the Environment is certain to make permission for large out-of-town centres almost impossible to achieve.

Blue Circle gained planning consent for the 1.7 million sq ft scheme in 1990 and last year announced pre- lets from retailers including Debenhams, Boots and Woolworths for almost a third of the space.

Prudential and Legal & General are thought to be in the forefront of Blue Circle's negotiations with large life insurance funds. Both are understood to want to increase their weightings in the direct property market.

Recent comments from John Gummer, the Environment Secretary, have indicated a sea change in Government policy away from American style edge-of-town developments. Mr Gummer says he will look more closely at applications to ensure that they respect the vitality of neighbouring town centres.

His remarks prompted a hostile reaction from the property industry, which said his guidance could restrict economic growth and create inflationary pressures.

Mr Gummer's new attitude towards edge-of-town developments runs parallel to his desire to see a reduction in motoring and roadbuilding. He favours measures to increase the cost of motoring in order to encourage greater use of public transport.

If the Bluewater scheme is built it will compete with the Lakeside shopping centre across the Thames at Thurrock in Essex. Both centres are situated near the M25 motorway, giving them potentially huge catchment areas.

Lakeside was recently valued at pounds 420m by DTZ Debenham Thorpe, the surveyor, in preparation for the flotation of the centre's owner, Capital Shopping Centres, which is being spun off from Transatlantic, the property and insurance group.

The valuation raised eyebrows in the City because it implied a yield below 7 per cent.

Retail property values have been rising for two years under the weight of institutional money aimed at the sector.