Project starts and main contract awards both experienced declines on the previous year in the three months to January. On a more positive note, detailed planning approvals increased against both the previous year and preceding three months to provide a boost to the development pipeline.
Retail overview
Totalling £235m, retail work starting on-site during the three months to January fell 55 per cent against the preceding three months to stand 33 per cent lower than a year ago. No major projects (£100m or more) commenced on-site, in contrast to the preceding three months. Underlying project-starts (less than £100m) experienced a 29 per cent fall against the preceding three months on a seasonally adjusted (SA) basis as well as 33 per cent against the previous year.
Retail main contract awards totalled £372m, an increase of 46 per cent against the preceding three months but a fall of 26 per cent against the same period a year ago. The value of major projects totalled £130m during the period, an increase on the preceding three months and previous year where no projects reached the contract awarded stage. Underlying contract awards decreased by 27 per cent (SA) against the preceding three-month period to stand 52 per cent lower than the previous year.
Detailed planning approvals, totalling £618m, increased 29 per cent against the preceding three months to stand 11 per cent up on the previous year. The growth was exclusively due to the increase in underlying approvals which grew 40 per cent (SA) compared with the preceding three months to stand 38 per cent higher than the previous year. Unlike the previous year, there were no major planning approvals, which repeats the trend of the previous three months.
Types of projects started
Supermarkets, totalling £144m, accounted for 61 per cent of all retail project-starts during the three months to January. The value of starts decreased 15 per cent on the previous year.
Shop projects commencing on-site added up to £48.2m, a 51 per cent decline against the previous year to account for 21 per cent of the sector.
Accounting for 10 per cent of the sector, petrol filling stations were the only project type that experienced growth (+15 per cent) against the previous year to total £23.4m.
Retail Warehousing project-starts fell by 70 per cent against the previous year to total £2.8m, accounting for 1 per cent of the sector.
Unlike the year before, no shopping centre developments started on-site.
Regional
Retail work starting on-site in Scotland increased 185 per cent against the previous year to total £40m, accounting for a 17 per cent share of the sector during the three months to January. Growth accelerated due to the commencement of a petrol filling station project in Gladsmuir with a value of £5.8m. The North East was another area to experience growth (+29 per cent) against the previous year. Project-starts in the area totalled £18m to account for an 8 per cent share of sector starts. Wales (+9 per cent) and West Midlands (+5 per cent), also experienced growth, with the value of project-starts totalling £12m and £27m respectively.
However, most regions experienced weak periods for retail project-starts, especially London which experienced the steepest decline (-89 per cent) against the previous year to total £9m, accounting for a 4 per cent share of the total value. The South West accounted for 16 per cent of starts but experienced a decrease of 12 per cent against the previous year to total £38m. The slowdown was softened by a mixed-use development project in Bristol with a value of £14m. The East of England experienced the second sharpest decline of any area, with project-starts falling by 61 per cent compared to the previous year’s levels to total £17m.
The three months to January was a strong period for retail planning approvals in most of the UK. The North West had the highest proportion of retail approvals, with a 21 per cent share, and almost quadrupled against last year’s levels, to total £130m. This growth was almost solely due to a £60.4m garden centre development in Lancashire. Project approvals in Yorkshire & the Humber experienced an increase of 72 per cent against last year’s levels, totalling £80m, accounting for 13 per cent of the sector. In the East Midlands the value more than doubled against the previous year to total £77m and was the third most active region, with a 12 per cent share.
The West Midlands experienced the second highest boost in planning approvals, accounting for 7 per cent of the sector. It almost tripled on the preceding year, bringing the value up to £40m. London, on the other hand, did not fare so well. Accounting for 5 per cent of the sector, project approvals decreased 85 per cent against the previous year’s levels, totalling £31m. Approvals in Northern Ireland also fell (-53 per cent) and totalled £13m, accounting for 2 per cent of the sector. The South West was the only other area that experienced a decrease during the period. Here approvals fell 3 per cent against the previous year to total £30m, accounting for 5 per cent of all sector approvals.
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