City is target for retailers, says Land Securities

Gerald Jennings, a director at Land Securities, said the revival of the 350m Trinity Leeds scheme and the 55m Leeds Arena development are increasing investor confidence in the city.

"People are starting to see Leeds is doing something," he said. "It's really moving forward. If Leeds moves forward, it will have benefits for the wider city region and will be good for us in Yorkshire."

Mr Jennings is responsible for the Land Securities portfolio in the North of England and Scotland, which is worth in excess of 1bn.

In an interview with the Yorkshire Post, he delivered an upbeat assessment of the economic outlook for the retail sector and related commercial property market.

Mr Jennings said: "Retail tends to be the first sector of the economy that goes into recession. By the same token, it tends to be the first out. We are seeing a little bit of that old adage coming through. It's leading in terms of its performance, particularly by comparison to the office sector.

"We have a cautiously optimistic approach about going into 2011. We are seeing some good results from retailers.

"The good retailers will continue to perform quite well and as they go into into 2011 and further ahead into 2012 think they can see optimism as well."

Land Securities has so far let 47 per cent of the 750,000 sq ft Trinity Leeds scheme. Next and River Island are relocating within the city to the scheme, while Top Shop is expanding its existing store into the development.

Fashion retailers Hollister and Cult will be new entrants to the city, with unconfirmed suggestions that Apple is set to sign up. Cult has committed to 20,000 sq ft of space – its biggest single-site store in the UK.

Land Securities – due to report half year results today – recommenced work on Trinity Leeds in the first week of August after halting in 2008. Two cranes are on site and steelwork is now visible on the city skyline.

The project is running on schedule and will open as planned in spring 2013, said Mr Jennings.

He said the centre would have mass-market appeal and would not be competing against upmarket Victoria Quarter. He is in talks with an "iconic restaurateur" about a major food offering, but would not name names.

Mr Jennings said: "I don't want this to be just another retail shopping centre in a city. I want it to have something which is different and which people will remember as unique to Leeds."

He has been in talks with local artists groups about establishing some exhibition or performance space in Trinity Leeds.

A common complaint about shopping centres is that they lend a homogeneous nature to provincial towns and cities. In response, Mr Jennings said: "If you are a consumer and your local shopping centre does not have a Hollister or a Cult or a River Island you actually want one of those. You want to see those big brands."

He added: "There has been some concern that retailers will move to Trinity Leeds and leave vacant units behind them. That's the worst thing I want to happen because it does not do Leeds any good. Retailers not already in Leeds are speaking to Next about its space because they might not be able to get in to Trinity Leeds. The appetite from retailers is really at the high end of demand."

He added: "After Cambridge, Oxford and Guildford, retailers have Leeds as the city they most want to come to. Leeds is fourth of all towns and cities in the UK. That's a hugely positive fact. It gives us more confidence in what we're trying to do in Leeds. Everyone in Leeds should take confidence from that."

Land Securities is making further investments in the White Rose shopping centre, including a new 20,000 sq ft site for value fashion retailer, H&M, which will open next spring.

The company is Britain's biggest real estate investment trust.

Mr Jennings said: "We are in a fortunate position compared to a lot of other property companies. We are able to finance these (schemes] entirely. We are not reliant on going to the bank for every project and development we want to do."

Meanwhile, property developer Hammerson plans to bring forward amended plans for Eastgate Quarters in Leeds, which includes Marks & Spencer and John Lewis as anchor tenants.

The revised plans are being drawn up in consultation with Leeds City Council.

BLEAK PICTURE FOR REAL ESTATE

Development activity in the wider commercial real estate sector is set for a further three months of declines, as austerity measures in the public sector lead to a bleak industry outlook, a survey said.

The report by Savills found commercial property development activity fell for a third consecutive month in October, with public sector activity contracting sharply and extending its run of declines to eight successive months.

The private sector saw moderate growth after two months of falls, Savills said.

Developers said they were concerned by the continuing lack of available credit, the economic outlook and forthcoming public sector spending cuts.