New video released
Retail squeeze forces St James to shave rents
Interior: a mix of shops and food outlets
St James Quarter, the new Edinburgh retail destination, has been forced to accept lower rents and profit in order to ensure its long term success, said the project director overseeing the development.
In a newly-released fly-through video Martin Perry speaks about the £1 billion scheme being a 20-year vision.
Mr Perry said the £1 billion development, due to open on 24 June and providing 3,000 jobs, was 90% let two weeks before work began, but he admitted that a combination of factors have contributed to tenants negotiating a hard bargain.
Mr Perry said the strategy has been to target the “right mix” of occupants because it “fits in with what else is going on in the city.
“You have to engineer how to get that mix absolutely right and that means sometimes forgoing the rent levels and the profit that you might want to make in order to get that long term vision to be successful.
“We have tried to do it in the worst retail market that anybody could deal with… the impact of the internet, the Brexit impact, foreign retail investors not particularly interested in investing in the UK, and on top of that the pandemic.”
He added that it was important to be “thinking 20 years ahead, otherwise it is irrelevant from the day it opens. The pay back is 20 to 30 years. It needs to continue to perform and expand.”
Nick Peel, St James Quarter managing director, said investors had “always been ultra passionate about integrating with the rest of the city. Partnerships are important.”
He said: “That in itself is quite a unique approach. I cannot think of many large scale assets in the UK where that is the case.”
About 60% of the scheme’s fascias will open on day one. Over three to four months this will rise to about 80%.
Retail accounts for just one-third of the floorspace at St James though the scheme will represent 20% of the city’s total retail offering.
Advertising firm Ocean Outdoor has secured a £25 million contract for a network of 35 digital screens at James.
Ocean said it had been awarded the ten-year digital “out-of-home” advertising contract following a competitive pitch with a lifetime contract value of £25m.
Under the terms of the contract, Ocean will have exclusive rights to sell and market the network of 35 digital screens within the development, including two large-scale full motion locations.