Hammerson’s chief executive has insisted the developer is seeing increased opportunities outside London and the South-east despite its recent decision to axe a £400m shopping scheme in Sheffield.
“Indicators such as housebuilding show that local economies are coming out of recession and we can create value out of that,” he added.
Mr Atkins was optimistic about the opportunities for shopping centre developments in the regions, despite Hammerson’s announcement in July that it had dropped plans for a £400m Sheffield shopping centre.
The retail developer withdrew from the Sevenstone scheme, which had been delayed since 2008, because it would not have offered attractive returns, Mr Atkins said.
However, Hammerson is on site with extension projects in Glasgow, Merthyr Tydfil, Newcastle and Northumberland worth around £53m.
Its £1.7bn pipeline of work also includes the £600m Victoria Gate development in Leeds, the first £120m phase of which is due to start on site next spring.
A contractor has not yet been appointed for the job, but Mr Atkins said Hammerson had a shortlist of “a small number of key contractors” and one will be appointed within the next four months.
Construction News understands Laing O’Rourke, Sir Robert McAlpine and Vinci are bidding for the job.
Mr Atkins admitted that for larger design-and-build projects Hammerson looked for “global contractors” with the right “capacity and skills”.
The developer has worked with Bovis Lend Lease, Laing O’Rourke and Sir Robert McAlpine in the past, but Mr Atkins said projects are procured on the open market and that while Hammerson values close working relationships, it does not operate a formal preferred contractor framework.
To ensure its developments benefit local communities from when shovels hit the ground, Mr Atkins said Hammerson aimed to have a “certain level” of local employment on each project – a level agreed with contractors during procurement.
On regional extension and redevelopment projects, Hammerson is interested in working with smaller-sized contractors with local bases.
Having contracting teams near the project benefits the local economy, he said, but also means construction workers “have an immediate understanding of the site, better contacts with the local authority and links to the local supply chain”.
Mr Atkins said it is tempting with future developments to invest “beyond the red line” into residential, leisure and commercial schemes, because the rates of return would be attractive.
He added that Hammerson’s forthcoming major developments in Croydon and the extension of Brent Cross would have uses beyond retail, but that it would work with other developers to deliver them.
“We would favour bringing in specialists with skills to bring that forward, as they are quite different to retail,” he said.
Mr Atkins was speaking in the week Hammerson revealed research carried out with Jones Lang LaSalle and Envoy Partnership into the socio-economic impact of its UK shopping centre portfolio.
The report found that due to the often temporary or part-time nature of employment in the construction industry, six times more non-full-time equivalent jobs would be created per project than full-time jobs.
It estimated, for example, that 2,700 temporary or part-time construction jobs would be created in the first phase of Victoria Gate.
By creating jobs in the supply chain, leading to an increase in household income, the analysis suggested that an additional £1.5m would be spent in Leeds in each year of the two-year construction period.
Demonstrating the true value of shopping centres also found evidence that they can kick-start further town centre regeneration, stimulating investment and creating additional construction jobs.
The report attributed £500m of investment in the Birmingham New Street area to the opening of the Bullring shopping centre in 2003, and £175m of further investment in Southampton’s cultural quarter to its WestQuay shopping centre.
Mr Atkins admitted it is “difficult to say what would have happened without [the Bullring]”, but said a large proportion of investment in the area since then is because the shopping centre paved the way for investors.
The research also revealed that Hammerson’s developments have regenerated areas in providing more accessible transport infrastructure and, in some cases, an increase in local property values.
- Victoria Gate Phase 1, Leeds – £120m, 37,000 sq m
- Elliott’s Field, Rugby – £35m, 16,000 sq m
- Watermark, Southampton (pictured) – £70m, 17,700 sq m
- Brent Cross Leisure, London – £20m, 9,000 sq m
- Croydon town centre, London – £500m, 200,000 sq m
- Orchard Centre, Didcot – £40m, 11,000 sq ft
- The Goodsyard, London – £100m, 5,750 sq m
- Brent Cross extension, London – £350m, 90,000 sq m
- Victoria Gate Phase 2, Leeds – £480m, 73,000 sq m
Schemes in bold are major developments, others are smaller extensions/redevelopments