The Buchanan Partnership BUCHANAN QUARTER – TAX INCREMENT FINANCE BUSINESS CASE Glasgow City Centre Retail Survey 22 November 2010 – rev 5d www.gvagrimley.co.uk GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey Contents 1. INTRODUCTION.........................................................................................................2 2. SURVEY METHODOLOGY........................................................................................5 3. SURVEY RESULTS....................................................................................................9 4. FUTURE VACANCY.................................................................................................14 5. PROPOSED ADDITIONAL FLOORSPACE ............................................................18 6. RETAILER REQUIREMENTS ..................................................................................21 7. RETAILER REQUIREMENTS AND AVAILABLE FLOORSPACE .........................25 8. SENSITIVITY ANALYSIS .........................................................................................27 9. CONCLUSION ..........................................................................................................30 22 November 2010 Rev 5d GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey Appendices Appendix 1 - Map of Primary and Secondary Retail Areas Appendix 2 - Primary Retail Area Unit Survey Appendix 3 - Secondary Retail Area - Unit Survey 22 November 2010 Rev 5d GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey Tables / Figures • Table A – Definition of Primary and Secondary Retail Locations • Table 1 – Average size of units surveyed • Table 2 – Analysis of vacant units • Table 3 – Current Retail Floorspace Supply • Table 4 – Retail Floorspace Capacity • Table 5 – Additional Retail Floorspace Demand • Table 6– Analysis of retailer requirements • Table 7 – Residual Demand for Retail Floorspace • Table 8 – Sensitivity Testing (Scenario 1) • Table 9 – Sensitivity Testing (Scenario 2) • Table 10 – Sensitivity Testing (Scenario 3) 22 November 2010 Rev 5d 1 GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey 1. INTRODUCTION 1.1 The Buchanan Partnership (between Land Securities PLC and Henderson Global Investors) owns the existing Buchanan Galleries Shopping Centre in Glasgow. The Galleries (circa 600,000 sq ft) is one of the largest shopping centres in Scotland. 1.2 On behalf of Glasgow City Council, The Buchanan Partnership instructed GVA Grimley Ltd in September 2010 to undertake a survey of retail premises in Glasgow City Centre as part of their Business Case to support their proposal to The Scottish Government for support through the Government’s Tax Increment Finance (TIF) pilot initiative. 1.3 If successful the TIF funding will be used for essential public infrastructure to enable proposed enhancements to the “Buchanan Quarter”. These infrastructure works will be complementary to the commercial developments associated with the Buchanan Quarter but will also help to maximise the wider economic and environmental benefits to Glasgow and the wider city- region that will undoubtedly result following the regeneration of the Buchanan Quarter. 1.4 Buchanan Partnership and Glasgow City Council are of the view that the planned Buchanan Quarter will operate effectively as an integral part of Glasgow City Centre’s Primary Retail Area. 1.5 The Buchanan Quarter Business Case as submitted sets out a proposal to offer 592,222 sq ft (55,000 sq metres) (gross) additional floorspace. This Retail Survey by GVA is concerned only with retail, restaurant or cafe floorspace in Glasgow City Centre (as defined in Appendix 1). Therefore to be consistent with this approach we have calculated the equivalent floorspace from the Buchanan Quarter Business Case for these use classes. This amount to circa 522,000 sq ft . The remainder of this Retail Report by GVA Grimley Ltd uses this latter figure and excludes the proposed floorspace for cinema, leisure and bars to allow for direct comparison with retail floorspace elsewhere in Glasgow City Centre. 1.6 Included within the Buchanan Quarter proposals are: • a new multi-storey car park and retail concourse adjacent to Queen Street Station to ensure that the proposed new development improves integration between the transport hub and the Buchanan Quarter. This integration will complement the extensive public realm improvements planned for the new Quarter. 22 November 2010 Rev 5d 2 GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey • the Atlas site (185-221 Buchanan Street) on the city block of Buchanan Street / Bath Street / West Nile Street (immediately west of the main entrance to the Galleries) which is proposed to accommodate circa 125,000 sq ft of retail on ground, first and second floors as well as residential apartments on the upper floors (the NNNDR from 185-221 Buchanan Street is excluded from the NNDR calculation in Glasgow City Council’s Tax Increment Financing Buchanan Quarter Business Case). Purpose of the Retail Survey 1.7 The purpose of this Retail Survey as part of the TIF Business Case is to demonstrate the level of stated retailer requirements which could be satisfactorily accommodated within Glasgow City Centre (in existing vacant retail units and proposed new retail floorspace) assuming the Buchanan Quarter proposals are not implemented. We then go on to examine the likely effect on existing and proposed retail floorspace if the Buchanan Quarter proposals proceed as planned. 1.8 As far as GVA Grimley Ltd is aware no retail survey of the type undertaken here for Glasgow City Centre has been published in recent years. Retail Impact 1.9 This report is not an assessment of retail impact as it is traditionally undertaken to accompany planning applications for large scale retail developments. 1.10 On behalf of The Buchanan Partnership, GVA Grimley Ltd undertook extensive pre- application discussions with retail experts in both Glasgow City Council and the Glasgow and Clyde Valley Structure Plan Team in the run-up to the preparation and submission of the outline planning application for the Buchanan Galleries extension in April 2007. Agreement was reached through these discussions that an assessment of potential retail impact would not be required for the proposed extension of the Buchanan Galleries, by virtue of the fact that the outline application site lies almost entirely within the Principal Retail Area of Glasgow City Centre as defined by the City Council in their local development plan. 1.11 This view corresponded with Scottish Government Planning Policy (SPP8) at the time of that decision. That policy stated that detailed assessments of need and impact analysis is not required when the proposals are in accordance with the development plan and are located in a defined city or town centre. 22 November 2010 Rev 5d 3 GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey 1.12 Glasgow City Council are committed to ensuring that Glasgow City Centre, as the sustainable heart of the city-region and the West of Scotland, will continue to provide a range and intensity of retail and other city centre uses that will consolidate its place as one of the UK’s prime retail locations. 1.13 Glasgow’s Local Development Plan (City Plan 2; December 2009) and the Glasgow and Clyde Valley Structure Plan (2006) both identify a development strategy to deliver this aim, which seeks to provide opportunities to promote modern forms of commercial development in accessible locations, particularly, by sustaining and improving Glasgow City Centre as the commercial focus for Scotland’s largest city-region. The Buchanan Quarter proposals form an integral component of these plans. 22 November 2010 Rev 5d 4 GVA Grimley Ltd Buchanan Quarter TIF – Glasgow City Centre Retail Survey 2. SURVEY METHODOLOGY Assumptions 2.1 GVA Grimley Ltd has used a number of assumptions in their methodology for this Retail Survey. The principal assumptions are set out below. • The stated retailer requirements and their associated floorspace demands for Glasgow City Centre are accurate at the time of conducting the Retail Survey (September 2010); • All retail properties not trading on the date the retail survey was carried out are defined as being “vacant” for the purposes of this Retail Survey. This includes units being refitted at the time of the survey which may or may not have an identified retailer operator associated with that refurbished property. • Based on our local knowledge we have assumed all of the currently identified vacant units will be available at a similar level of floorspace for reoccupation by retail uses during the period of implementation of the Buchanan Quarter. • Stated retailer requirements could be accommodated without significant constraints within the identified vacant units within the Study Area. • Stated retailer requirements for “prime” and “secondary” locations correspond to the primary and secondary locations defined in this Study. • Those floorspace for retailers stating Glasgow as an “aspirational” requirement location has been split equally between GVA Grimley Ltd’s definition of primary and secondary locations; • The identified proposed additional new retail floorspace in the study area will be developed within the timescale of completing the Buchanan Quarter development • Suitable retail floorspace to accommodate previously stated requirements for Selfridges (circa 120,000 sq ft) and Harvey Nicholls