St James Centre – the start of a new chapter
Martin Perry, Development Manager with Henderson Global Investors, has been involved in redevelopment plans for Edinburgh’s St James Centre from the outset. Here he explains HGI’s approach to the £850 million scheme – one of the UK’s most ambitious city centre development projects – and explains how early engagement in the planning process helped smooth the way for the outline planning application.
What makes the site such an attractive investment opportunity?
It’s a great opportunity to boost Edinburgh’s retail sector and opportunities of this size rarely present themselves. Edinburgh is a wealthy market from a retail perspective and its global reputation as an iconic city provides HGI with a chance to expand our portfolio with an attractive offering to international investors.
How did you shape your development strategy?
The project has to fulfil a strong commercial need if it is to recoup the initial cost of the site. Access to transport infrastructure, much of which is already in place or emerging, was an important consideration as was the need to capitalise on the benefits of having a John Lewis department store onsite and connections with the city’s luxury shopping destination, Multrees Walk. So in many respects the strategy is to open up the site and deliver a strong commercial project over a period of time. Architecturally it has to look as if the development has grown organically; ensuring shoppers and visitors feel they are entering a quarter that is a natural progression of the existing city centre fabric, rather than an isolated development.
The outline planning application seems to have progressed smoothly. What do you put that down to?
It’s simple – early engagement with the City. We assigned a much larger budget for consultation than we normally would do. A series of public consultations and analysis of the site and its environments was carried out and we gave this research to the local authorities who then created a development brief that was eventually adopted as planning guidance. The whole process brought together all the different agencies and interest groups including Edinburgh World Heritage Trust, the architects’ Design Review Panel, Architecture and Design Scotland, the Cockburn Association, right the way through to disabled groups and neighbours.
Following the release of our initial designs, we went back to all the interested parties for a second round of consultation. Close liaison with City of Edinburgh Council saw fortnightly engagement meetings that enabled us to present our ideas and get immediate feedback.
As a result of this continuous discussion, when we finally submitted our planning application – a 16-week statutory review process that usually takes up to six months for such a large scale application – we were very impressed by the actual 19-week turnaround from submission to the planning committee.
Does the current economic climate affect your plans?
The very nature of the credit crisis isn’t an issue. The site itself is worth more than the drop down debt needed to secure it. What is an issue is that we are building something that has to hit the market running – i.e. residential property has to sell, shops have to be taken up and leased, occupiers for the hotel have to be signed up and office space will need occupants. While the current downturn naturally concerns us, the bulk of our leasing will be secured in 2014/15, by which time we confidently predict the market will be buoyant.
In terms of long-term security, St James remains a rare, flagship project and when we speak to potential investors they already know about the development and want to know more. There’s a lot of work to do, but it’s an exciting scheme for the future of Edinburgh’s city centre.
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