When TH Real Estate bought Edinburgh’s St James Centre in 2006 it hoped to pull off a redevelopment to create the stylish central shopping centre that Edinburgh shoppers have long called for. Ten years and a lengthy property downturn later, work will apparently start on the £850m St James Quarter in May 2016.
What does that mean for the City’s wider retail and leisure offering? Can the development create a “ripple effect” to help rejuvenate surrounding high streets and Edinburgh’s wider retail and leisure sector?
The St James Quarter will add 450,000sq ft of new retail space – however, the development is expected to take around four years to complete. Although John Lewis will continue to trade during this period, the other tenants face a period of change. Most have been scrambling to find suitable space in neighbouring high streets. For some, that will be a temporary affair before they locate back to the new centre. Others need to find a permanent home.
Frederick Street has clearly benefited. A few years ago, growing vacancies made the street feel down at heel and lacking in atmosphere. Now, ex-St James retailers Vision Express and Thorntons have taken units on the street. But that’s only half the story. Laings the Jewellers moved to the larger ex-Barclays Bank premises on the corner with George Street, while fashion retailer Pretty Green and high-end cookware retailer Le Creuset have also taken space.
If the turnaround on Frederick Street can’t be attributed wholly to the relocation of St James tenants, what has caused the recovery?
Well, TH Real Estate doesn’t plan to simply fill the new St James with the same old tenants. The redevelopment will encourage new entrants to the centre, but also into surrounding areas such as Frederick Street. The centre’s location, right in the heart of the city, within walking distance of the Princes Street, George Street, Hanover and Frederick Streets, has the potential to see the short term “re-location” boost to Edinburgh city centre high streets turn into a longer-term rejuvenation.
Rejuvenation both in terms of bricks and mortar (the existing centre has long been criticised as an eyesore) and in the wider sense of anchoring a mixed retail and leisure offering that residents and visitors want to experience.
Of course, the St James Quarter can’t do this on its own. We have already seen Apple opening a flagship store on Princes Street, while the Standard Life/Peveril Securities development on St Andrew Square will include TX Maxx, steak house STK Rebel, lobster shack Big Easy and Indian style café Dishoom.
Challenges do remain for Edinburgh city centre retailers that none of these developments will resolve – the online challenge, parking and rates to name a few. But the key is about generating footfall by creating areas that people want to visit.
The positive effect of a well-executed St James development is part of that solution.
Elspeth Carson is corporate real estate partner at Morton Fraser