One in five UK shopping centres 'at risk'

Published 26th Jan 2010

UK shopping centres worth a combined value of £10.1bn are at risk of defaulting on their loans, shopping centre organisation BCSC has warned.

Today, BCSC published its Secondary Centres report in conjunction with property consultant DTZ.

It said that one in five of the UK’s 820 shopping centres were at risk, with the north-west and the south-east the most vulnerable regions. Of the centres at risk, 20% were in the north-west and 24% were in London and the south-east.

The report said that secondary centres in the north-west were under threat from large regeneration schemes such as Liverpool One. Those in the south-east and London were most at risk of defaulting on their loans because they are the areas where the highest prices paid were in the boom.

Neil Varnham, BCSC president, said that shopping centres are often “the lifeblood of local economies and communities” and that, if these centres failed, it would harm consumers and local authorities as well as the owners, retailers and banks.

“Banks will only fund investments that make economic sense and this will ultimately drive their lending strategy. The role for a good asset manager is crucial to ensure that their investment is being managed effectively, bringing an understanding of retailers and consumers to attract new tenants, drive footfall and sales. There is a role for the retail property industry to play by addressing the perceived skills gap in asset management expertise,” he said.

Mark Williams, DTZ director, said secondary centres were faced with dramatic falls in capital values and rental income. He said that BCSC was talking to government for support for these centres on points such as empty rates relief.

“There is also an important role for local authorities – which should be encouraged to engage with stakeholders at the earliest opportunity to help proactively manage a shopping centre facing problems as part of an overall Town Centre asset management plan.”

Source: ' PropertyWeek '

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