PRESS RELEASE
CHALLENGING ECONOMIC CLIMATE IMPACTS ON DEVELOPMENT PROGRAMME
Hammerson announces its annual results today confirming its development programme has been impacted by the continued challenging economic conditions.
It’s Eastgate Quarters scheme, developed by The Leeds Partnership, a joint venture between Hammerson and Town Centre Securities has been affected by the current economic environment, a testing occupier market and land assembly issues.
The unprecedented conditions in the worldwide financial markets during 2008 have reduced all companies’ access to borrowing. In the property sector, this has resulted in a reduction in available capital for both investment and development opportunities, and lower portfolio valuations.
Equally, in a time of reduced consumer confidence, many retailers and leisure occupiers are cautious in their expansion plans. As a result of this, it is anticipated that main works on site are unlikely to commence before an improvement in economic conditions. The partnership will continue to progress with planning and design for the scheme.
Following the successful completion of the first phase of enabling works in 2008, the partnership requires the successful resolution of the Compulsory Purchase Order (CPO) legal challenge with negotiations surrounding land interests excluded from CPO to be concluded.
On completion, the 135,000 sq m scheme will create more than 100 new shops together with a restaurant district and importantly still includes two of the UK’s largest names in retailing, John Lewis and Marks & Spencer.
The scheme is also expected to create over 4,000 new jobs and will follow Hammerson’s successful employment and training initiatives which in 2008 delivered over 7,000 new jobs at its new retail schemes at Highcross Leicester and Cabot Circus, Bristol.
Andrew Hilston, project director for Hammerson commented: “We remain committed to the delivery of Eastgate Quarters, however, like many other cities in the UK, Leeds is subject to the same challenging conditions that continue to affect all business sectors across the country.
“We have a committed development team, a supportive local authority and the best combination of retail anchor stores in John Lewis and Mark & Spencer to ensure successful delivery of an exceptional scheme. We are confident that we will receive a positive decision regarding the CPO challenge, are continuing to work to ensure we deliver the best for the city.”
Richard Lewis, Group Property Director for Town centre Securities believes: “This is an important scheme for Leeds for the long term so this is not the time to be pushing ahead given current market conditions. It is essential the integrity of the development concept is preserved and we need to be patient to ensure this can be achieved.”
Cllr Andrew Carter, executive board member with responsibility for development said: “Eastgate Quarters remains a vital part of the city’s regeneration portfolio and we have worked extremely hard as a local authority to create the partnerships to facilitate its delivery. We will continue to work with the developers to move the scheme forward.”
Jeremy Collins head of retail development for John Lewis added: “Our department store within the scheme is an important part of our retail expansion programme. Eastgate Quarters represents an enormous vote of confidence for the city of Leeds highlighted by the continued commitment from Hammerson, Town Centre Securities, John Lewis and Marks & Spencer.”
For further information, please contact:
Catrin Morgan, Property PR Manager, Hammerson Plc
Tel: 020 7887 1063
Email: catrin.morgan@hammerson.com