The West Way Shopping Centre - Assessment of Development Options Viability and Deliverability - Vale of White Horse District ...
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The West Way Shopping Centre Assessment of Development Options Viability and Deliverability July 2015
1. INTRODUCTION
2
INTRODUCTION
• Current Occupiers include the Co-op Supermarket, Iceland, Lloyds
Pharmacy and Lloyds TSB.
• Vale of White Horse preparing an SPD for West Way
• BDP produced three development options
• DTZ appraised 3 development options
• Researched demand and market for: retail, foodstores, hotels, leisure,
residential and student accommodation
3
2. BASELINE ANALYSIS
4
Retail
Retail Centres in the Vale of Whitehorse
• Abingdon – largest centre
• Wantage – second largest centre
• Farringdon – Independent retailing focus
• Botley – Independent, local centre
Oxford City Centre
• 2 Miles from Botley
• Extension of the Westgate Centre
Retail Warehousing
• Supply estimated to be 1,156,000 sq ft
• Oxford Retail Park is the main open A1 retail park
• Botley Road has 3 retail parks – Botley Retail Park, Meadowside Retail Park and Seacourt Retail Park
5
RETAIL Retail
Independent Retailers
• Lower rental and end investment value
• Not viable to re-provide
• National brands improve the financial viability of a scheme and
attract other users
Potential Occupiers/ Form of Retail
• Fashion ‘v’ lifestyle
• ‘High street’ ‘v’ retail park
• Larger units for this location
6
Foodstores
Market Trends
• Disposal focus
• Limited acquisitions
• Lidl & Aldi most active
• Move away from large
store formats
Oxford
• Well covered by
Sainsbury's and Tesco
• Possible occupiers: Lidl,
Morrisons, Asda, M&S,
upsize of existing Tesco
7Hotels
• Undersupply of budget Hotels in Oxford
• Location likely to attract budget operation
• Travelodge and Premier Inn possible occupiers
• Provide strong covenants and are attractive to
investors
Yellow: prospects
Green: established hotels
8OFFICES
Offices
• Increase in demand – directed towards business parks
• Availability decreased
• Not an office market destination
• Low rents for this location, making development break even
• Offices add to the mixed uses rather than financially viable
9Leisure
Oxford Market
• Likely demand for a cinema
• No Cineworld in Oxford (actively acquiring)
• Strong niche operator demand nationally
Importance of leisure/cinema
• Vital to the scheme
• Improves footfall
• Attracts other occupiers, particularly restaurants
• Improves attractiveness to investors
10Residential
• Strong residential market
• High demand and values
• Older population
• Most appropriate development 1 & 2 bed apartments
• Likely to be limited demand for studios in this location
11Student Accommodation
• Attractive investment class
• Long leases to University provide low yielding investments – 6%
• Potential for postgraduate accommodation – Oxford Brookes Clive
Booth Postgraduate Centre has high demand
• Family student accommodation is very limited in Oxford; tendency
to lease private properties
• Financially viable
12Community
COMMUNITY FACILITIES Facilities
• Cost to development
• No financial value
• Enough value needs to be generated from other parts of a
development to bear the costs of providing these facilities
133. DEVELOPMENT OPTIONS
14OPTION 2 – Medium Mixed Use
• Retail, foodstore,
cinema, residential,
student
accommodation,
hotel, offices,
community uses and
surface car park
• Continuation of
Elms Parade
retailers
15OPTION 2 – Medium Mixed Use
• Produces the highest value of the appraised options.
• Most deliverable scheme due to the mix of uses and density of residential
and student accommodation.
• The ability of the scheme to attract development investment will be
dependent on the ability to lease the retail units, hotel and student
accommodation.
• It is likely the developer will want to pre-lease some of the elements.
• The retail units are of an appropriate size to attract out of town retailers to
the scheme.
16OPTION 3 – Residential Led
• Residential led development
• Elms Parade Retained
• Two foodstores
• No cinema
• No student accommodation
• Solus hotel
17OPTION 3 – Residential Led
• Least viable option – due to no student accommodation, cinema and
compromised retail units
• Compromised retailing – reducing rental figures and increasing voids
• No student accommodation – key value
• No Cinema – footfall driver and attracts other occupiers
• 2 foodstores – possible leasing implications and deliverability issues
• Least deliverable due to key scheme failures
• Ability to provide enough car parking on site is a concern
• The retail ‘strip’ is negatively affected by the inclusion of community uses,
by reducing the quantum of retail
18OPTION 4 – Maximum Intervention
• Maximum demolition – demolition of
Elms Parade and Barclays bank
• Larger retail units
• Includes student accommodation
• Limited retained users
• Large depth of units
• Cinema
• Student Accommodation
19OPTION 4 – Maximum Intervention
• Highest demolition cost associated with the scheme – higher compensation and CPO
implications
• Highest community facilities on the scheme
• Student accommodation improves the viability of the scheme
• Retail offer comprised – large depth of units and northern units facing out from the scheme
and broken up by community/residential uses
• Retail will impact the deliverability and viability of the scheme
• The hotel benefits from corner exposure but is some distance from the car parking
20SUMMARY OF COMPONENT VIABILITY
Unviable Breakeven Viable
Community Uses Existing Retail Foodstore
Cinema* Student
Accommodation
Offices New Retail (bulky)
Hotel Residential
Compromised Retail Restaurants
214. SUMMARY
22Summary
• Residential and student accommodation would need to be high density – fundamental to viability
• Cinema required to attract other users, including restaurants
• Hotel likely to be budget, if not Travelodge or Premier Inn, might be unviable
• Best form of retail would be larger sized units, out of town retail
• Demand still exists from the key occupier markets including foodstores and cinemas
• Securing pre-lets with all the key occupiers is vital to enable delivery of the scheme
• The most viable option is to retain the Barclays building and Elms Parade
• The cinema and foodstore are essential anchors that are required to attract other retailers and uses.
Without the inclusion of these uses the scheme will struggle to attract the required retailers and
restaurants.
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