Despite having planning permission, millions of sq ft of shopping centre space in the UK will never be constructed due to the challenging retail environment, according to latest reports.
Colliers International, a property consultancy firm, say that a drop in high street footfall along with a rise in online retail has meant that the cost of constructing or redeveloping many centres would exceed their value.
The report found that over 10 million sq ft of expansions to existing shopping malls and new build centres due to be constructed over the next three years will no longer be completed.
Colliers’ head of retail, Mark Phillipson, said that shopping centres normally take around 10 to 20 years to be put together, many of which reached the construction stage during the depths of the recession.
He added that despite being in a much healthier financial position than in 2008, the retail market is still not in a good enough economic environment to build new shopping centres and that the only way new centres would be constructed is through a prolonged economic boom.
Included in the report are some of the UK high street’s most high profile collapses in almost a decade, including BHS who said it would close after 88 years in business, with 164 stores to be closed down and 11,000 jobs lost.
Also included was the closure of Austin Reed, the formal menswear retailer whose suits had been worn by celebrities and dignitaries, as analysts said the rising strength of online competition resulted in its demise.
An independent retail analyst, Richard Hyman, said that over the last decade, online retail on its own has added the equivalent of 110m sq ft of trading space, which is approximately the same as 65 further Westfield London shopping malls.
He added that the retail industry has been left massively oversupplied due to a rise in the supply of retailers but without increased demand to go with it.