Analysis: Victoria Gate shopping centre - Retail’s next step in Leeds

Barely two months after the opening of Trinity Leeds, a £350m shopping centre complete with fine architecture and a sweeping glass dome roof, and retail in Leeds is back in the spotlight.

This time it’s property developer Hammerson, which has revealed the designs for another retail scheme, hoping to take the city by storm.

The designs are for Victoria Gate, a 1.2 million sq ft retail and leisure development created to further develop Leeds as a leading destination for shopping. The development is split into two parts. The first phase will include an arcade with 30 retail units, restaurant and leisure facilities, an 800 space car park and a 260,000 sq ft John Lewis store linking the scheme to the city’s adjacent Grade II listed Victoria Quarter, which houses brands such
as Jo Malone and Reiss, which are also owned by Hammerson.

If given the green light by Leeds City Council, Hammerson plans for construction on the first phase to begin next spring, and for opening in autumn 2016.

Since Victoria Gate is the second shopping development to open in Leeds in three years, you could be forgiven for thinking that Leeds has suddenly turned into a city full of lottery winners. After all, Trinity Leeds is the only large-scale retail destination to open in Western Europe this year and Victoria Gate is a mammoth development costing £600m. However, the reality behind this flurry of retail activity is a little less dramatic - both projects were hit by delays.

Victoria Gate was originally expected to be completed in 2012.

“The Trinity Leeds scheme and Victoria Gate were hit by the recession,” says Councillor Richard Lewis, Leeds City Council executive member for the economy and development.

Still, there’s no denying that the creation of two major retail investments when an economic cloud still hangs over the country is a brave move.”There’s pent-up demand for this,” says Joe Swindells, development executive at Hammerson. “Leeds is undersupplied with modern retailers. It’s behind when compared to other cities and this means it can compete with, if not overtake, other cities.”

Stephen Springham, senior retail analyst at Planet Retail, agrees the city needed an injection of new retailers. “Leeds is a strong city centre but it just hasn’t had significant investment for a number of years. It had good bits but it wasn’t very joined up. Trinity Leeds has cemented that and now it’s on to the next stage with Victoria Gate.”

Hammerson has done its homework and its presentation pack is full of figures highlighting why Leeds is a sound retail investment. Its research shows that the city’s economy is worth £52bn a year - larger than Greater
Manchester’s, which stands at £48bn. Non-grocery spend for the city’s total catchment area is worth £6.3bn.

Bringing in luxury brands

While Trinity Leeds has arguably plugged the hole in Leeds’ lack of mainstream retailers, the first phase of Victoria Gate is designed as a different proposition. Like Hammerson’s Victoria Quarter, the arcade dubbed ‘the Knightsbridge of the North’, the city’s latest venture is targeting premium and luxury brands.

Sheila King, group retail leasing director at Hammerson, says the company sees an opportunity to bring in a critical mass of luxury brands.

“Harvey Nichols tells us that some of their shoppers come into Leeds but will also go to London. This end of the market wants to treat themselves -they’re after luxury and premium brands. Victoria Gate will provide that.”

Springham also believes Leeds is crying out for a development of this kind. “Leeds has got Harvey Nichols but other than that it doesn’t offer depth [in the luxury market].”

Councillor Lewis believes Victoria Gate will help attract consumers from Yorkshire towns such as Dewsbury, Huddersfield and Halifax, who at present make premium purchases at shopping destinations such as the
Trafford Centre in Manchester.

Hammerson won’t divulge the names of the retailers it’s keen to woo for the first phase of Victoria Gate. But it will say that the retail offer will be a similar mix to Victoria Quarter, which spans fashion, homeware, beauty, jewellery and accessories. The developer aspires to have a flagship Marks & Spencer store as part of the second phase of development. For now, Hammerson has achieved one retail scoop in the form of John Lewis, the scheme’s anchor.

John Lewis property director Jeremy Collins is optimistic about the venture, which is not surprising given the length of time the retailer has wanted to be in Leeds. “We’ve been working with Hammerson and Leeds City Council for eight years on this… we’ve actually aspired to be in Leeds for 30 years. Leeds is a major regional city and Victoria Gate provides a very good solution to our requirements for a department store. It’s adjacent to the Victoria Quarter and historical Leeds market, and it has an affluent customer base.”

A recent trip to Trinity Leeds provided Collins with further encouragement on the state of Leeds’ economic health.

“It was heartening to see the number of shopping bags. From what I saw, a John Lewis store is absolutely sustainable. Customers are asking, ‘When are you coming to Leeds?’ There’s pent-up demand.”

However, Hammerson’s retail project has not been welcomed by everyone. A campaign group, the Friends of Leeds Kirkgate Market, has challenged the development. On its blog it argues that construction disruption and traffic will impact Kirkgate Market. Friends of Leeds Kirkgate Market did not respond to Retail Week’s requests for an interview.

Keeping with heritage

Victoria Gate will blend old and new. Hammerson’s designs are inspired by the city’s heritage. The design includes an ornamental roof, shopfronts featuring a glazed black design consistent with the classic look of the Victoria Quarter, and a mix of white terracotta and red bricks to emulate Leeds’ traditional buildings.

“We’re trying to build on Leeds’ rich architectural history but we don’t want to build a copy of the Victoria Quarter,” says Swindells. “We want a modern interpretation - hopefully something beautiful that has a wow factor.”

In line with this, the venture’s original name, Eastgate Quarters, was recently scrapped to pave the way for a name that resonates more with the city and the existing Victoria Quarter.

With a fully occupied Victoria Quarter, there’s no doubting that its younger sister will encourage a fresh crop of aspirational and luxury brands to come to Leeds. But for Councillor Lewis, the scheme will have a wider impact on the northern city.

“Victoria Gate will help bring footfall to the area and will help shape and define the city.”

It’s all happening in Leeds - as one of relatively few pockets of the UK with development potential, the next few years will be busy for the city.