MCR Property Group has decided to shut its 163,000 sq ft shopping centre for good at the end of the lockdown, citing a persistently challenging retail environment.
The developer and operator purchased The Wheatsheaf in Rochdale from Longacre Properties for an undisclosed sum in 2017.
It has since unveiled plans to repurpose and expand the retail complex to attract a fresh influx of leisure, commercial and retail uses to complement the existing occupiers. The proposed extension was to adjoin the emerging £100m Rochdale Riverside retail and leisure scheme, being delivered by council regeneration body the Rochdale Development Agency. Contractor Willmott Dixon was appointed to deliver the second phase of works last month.
MCR said this week “the nationwide shift in shopping habits has changed the retail landscape, with consumers choosing to shop online rather than visit town centres.
“Furthermore, the ongoing coronavirus pandemic has expedited this migration from traditional shopping habits and the impacts on the retail sector have been significant.”
Since re-opening the centre in June after the last lockdown, footfall has been tracking at an average drop of 45% year-on-year, and the latest national Covid restrictions will have impacted the figures further, MCR added.
The centre has lost several key tenants since 2017, including stationery firm Rymans, retailer Wilko’s and, in 2020 alone, Argos, BrightHouse and Bargain Buys.
Among its remaining tenants are fashion retailers New Look, Peacocks and Select Fashion, and with New Look and Select already subject to company voluntary arrangement (CVA) proceedings and Peacocks expected to appoint administrators, “the financial viability of the centre is not sustainable”, according to MCR.
The developer said it “has informed all staff and advising tenants of its difficult decision to close the centre in light of the current circumstances”.
Charles Denby, asset manager at MCR Property Group, said: “Nationwide, we continue to see a large number of retailers experiencing serious trading difficulties, and more are resorting to insolvency procedures to cut their rent bills.
“This year has been a surreal, once-in-a-generation experience that will not be forgotten, with Covid directly accelerating the decline of high street retail and the move to online shopping.”
He added: “When the change in shopping habits collides with reduced income, an excess of space, and cost structures that are simply no longer realistic, landlords have to take action.
“We understand the impact the closure of the Wheatsheaf Shopping Centre will have on our tenants and will assist where possible through this difficult time.”