Galleries' extension to cost GBP400m RETAIL: CENTRE

0 Comments | Sunday Herald, The, Sep 21, 2008 | by Steven Vass Deputy Business Editor

THE extension to the Buchanan Galleries shopping centre in Glasgow city centre is expected to cost GBP400 million, the Sunday Herald can reveal.

The project, which is a 50-50 joint venture between developers Henderson Global Investors (HGI) and Land Securities, proposes to double the centre's retail space to 366,000sqm by adding shops, restaurants and residences. The developers are hoping to receive outline planning approval from the Scottish government in the next couple of weeks.

Myles White, fund manager of HGI's UK shopping centre fund, said: "If we get outline planning approval, we will move towards developing detailed plans. We have started tendering for contractors and have a shortlist of six."

The plan also involves demolishing the current car park and revamping Buchanan Street bus station. It is one of two projects involving HGI in Scotland as part of its strategy of investing in major city centre retail complexes around the UK. The other is the St James Quarter in Edinburgh, for which the developer lodged an outline planning application last week.

White said that the Edinburgh project would see the unloved St James Centre at the west end of Princes Street demolished and replaced by shops, hotels, restaurants, leisure facilities and homes. If the project is approved, it will offer 90 shops compared to the current 60 and the overall retail space will double to 93,000sqm.

He agreed that the new Edinburgh development would "have an impact" on out-of-town complexes like the Gyle Centre and Edinburgh Fort Kinnaird, but he said that none of these were comprehensive enough to satisfy shoppers.

"Many consumers within Edinburgh go to places like Livingston and Glasgow to do their shopping because that's where the best shops are. Edinburgh should be one of the top five retail cities in the UK [Glasgow is currently third], and we believe the St James Quarter will make a huge difference, " he said.

He would not be drawn on the estimated cost of the Edinburgh project, which began after HGI bought the centre from Ireland's Donegal Place Investments for GBP184m. The total size of the HGI fund is GBP9.3 billion.