Hammerson getting ready to revive mothballed scheme

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

Construction was initially scheduled for completion in 2012, but work stalled due to the recession.

In a statement issued yesterday, Hammerson said the Eastgate scheme had been fully reviewed in "close collaboration" with Leeds City Council.

The statement added: "Following this review, Hammerson is proposing revisions designed to improve the shopping experience and respond to retailer requirements. It is expected to accommodate around 1m sq ft of new retail and leisure space and around 2,500 shopper parking spaces."

Hammerson said the scheme review revealed a strong demand for "aspirational fashion" aimed at young people.

The revised plans are also expected to include a catering quarter, offering everything from snacks to evening dining.

"Over the coming months, the revised design will evolve as key retail and city stakeholders are consulted with a public exhibition on the new scheme expected in the autumn,'' the statement added. "It is anticipated that a revised scheme will be submitted to Leeds City Council before the end of the year.

Andrew Hilston, Hammerson's project director for the Eastgate scheme, said: "A regeneration project of this scale has the potential to truly transform this part of the city.

"We are committed to our vision for Eastgate Quarters which will deliver high quality retail space, offices, statement architecture and outstanding public realm. Eastgate will add to the national and international standing of Leeds as well as providing in the region of 4,000 new jobs."

Peter Cole, Hammerson's chief investment officer, said the amended application would reflect the changes experienced by the economy since the scheme was originally proposed. Hammerson has not indicated when it believes the Eastgate scheme will be completed.

Hammerson, which also owns the Bullring shopping centre in Birmingham and the Brent Cross shopping centre in London, said its markets continued to recover from recession after lower vacancy levels and growing income helped its half-year profits to rise seven per cent

Hammerson said adjusted profits improved to 70.2m in the six months to June 30.

Occupancy improved to 96 per cent at the end of June 30 while growth in like-for-like rental income was five per cent. Demand for office space in central London reached a three-year high during the first quarter, as a more optimistic finance sector took advantage of lower rents and incentive packages.

John Nelson, the chairman of Hammerson, said: "Although our markets have continued to recover from recession over the first half of 2010, the outlook remains uncertain.

"Against this background we are maintaining a clear focus on improving our portfolio, maximising the income from each of our assets and sound financial management.

"We have made good progress this year in each of these areas. The underlying quality of our portfolio has been demonstrated in our results, with lower vacancy and growing income in a challenging environment."

Some retail tenants doing well in recession

Property group Hammerson mothballed new developments in the UK, including the Eastgate scheme in Leeds and Sheffield's Sevenstone development, when the recession hit.

The retail property specialist, which owns or co-owns some of Europe's most popular shopping centres,said consumer confidence was flagging but some retail tenants who had survived the global property slump were now thriving due to lower market rents and weaker competition.

Chief executive David Atkins said: "Although the retail environment remains challenging, trading at our regionally dominant shopping centres remains strong."

Hammerson's chief investment officer Peter Cole, said the revised scheme for Leeds reflected the changes in the economy since it was first proposed.