Eldon Square bucking national retail trend
Feb 27 2009 by Graeme King, The Journal
ELDON Square Shopping Centre in Newcastle is bucking national retail trends by seeing an increase in the number of visitors to its malls.
The news from owners Capital Shopping Centres, part of the UK’s mall owner Liberty International, is encouraging at a time when there have been gloomy forecasts for the retail sector.
Last month The Journal reported how Newcastle’s top shopping destination of Northumberland Street had seen a 19% slide in footfall during December 2008 compared with a year earlier.
The most recent report from the Office for National Statistics said retail sales volumes were up in the three months to January 31, but the actual value of non-food sales was down 1.6%.
But yesterday, as Liberty posted its 2008 results, Kay Chaldecott, managing director of Capital Shopping Centres, said she was very pleased with Newcastle’s performance.
She said: “Eldon Square footfall is defying gravity. It’s very positive – up 5% on last year and the year before. Newcastle has been an absolute star performer. We have both an interest in the MetroCentre and a 60% interest in Eldon Square. We think Newcastle is a fantastic city.”
The managing director also revealed that the new 175,000sq ft Debenhams department store on Newgate Street would be handed over to the retailer next month to be fitted out, ready for opening at this time next year, when the whole of the new St Andrew’s Way will open for business.
The new mall will also feature a new Tesco Metro outlet, to add to the range of supermarket operators in the immediate area, where Waitrose, Marks & Spencer, the Co-op and Sainsburys are all represented.
She said: “It’s a case of really being positive and talking to the retailers. We are hoping it (the extension) will be complete by this time next year. Everything will open at the same time, but a department store needs 10 months to be fitted out over several floors.
“We are delighted with the lettings achieved so far – we have 73% of the income committed and 83% of the floor space either exchanged or in solicitors’ hands.”
Despite the good news for Eldon Square, Capital Shopping Centres revealed that yields (rent received divided by a centre’s value) on both Eldon Square and the MetroCentre have moved out to over 6.5%, such is the state of the retail economy.
The market value of CSC’s 60% stake in Eldon Square has fallen 13% from £258m at the end of 2007 to £223.4m at the end of 2008 and CSC values MetroCentre at £837.6m – a 17% fall from 2007’s valuation of just over £1bn.
And Liberty itself is considering a rights issue of up to £350m as retail insolvencies and declining property values hit revenues. The value of its property portfolio fell 18 % to £7.1bn.
