SPECIAL REPORT | Can Barons Quay be rescued?
Since the retail and leisure scheme in Northwich town centre first opened in 2016, Barons Quay has struggled to attract tenants with only a cinema, a restaurant, and a supermarket taking space in the 225,000 sq ft development. Cheshire West & Chester is projected to spend at least £71m on the project and the council insists it will be a success. Place North West investigates.
It’s a Monday afternoon in Northwich. The main high street, running from Witton Street through to Weaver Way, is surprisingly busy for early in the week. But just a two minute walk away, the area suddenly transforms into something of a ghost town – an imposing new retail centre, all clad in black and glass with neat and tidy public realm – that’s known as Barons Quay.
The few shoppers present are either going to the recently-opened Asda or going to eat at the Wildwood restaurant, the first eatery to open in the newly-built scheme. Speaking to Place North West, most don’t seem to know what the shopping centre is for, given there are very few units open, with others even going as far as to criticise the area as being “unwelcoming” and “a waste of money”.
Since Cheshire West & Chester Council decided to invest in the project in the early 2010s, the overall projected spend on the scheme out of council coffers is projected to be £71m, according to a freedom of information request seen by Place North West.
As of the end of 2016, £54.4m had already been spent, and the council has borrowed £62m to finance the scheme. At present, it seems there isn’t a great deal to show for it, with an Odeon Cinema, an Asda, and Wildwood as the only three tenants.
Asda has taken the largest unit at 28,000 sq ft, although this is significantly lower than the 68,000 sq ft the supermarket said it would take when it was announced as an anchor tenant in 2013. Wildwood’s unit is around 3,500 sq ft, while the Odeon includes five screens.
Designed by Broadway Malyan and completed by contractor Balfour Beatty in 2016, the overall project includes 225,000 sq ft of space in total.
The council has promised more deals to come, including a “major fashion brand” which has exchanged on a 7,500 sq ft unit. A further 13 units are said to be under offer by the council, but this still leaves 14 units vacant, ranging between 15,000 sq ft and 1,500 sq ft, nearly 18 months after the scheme first opened.
Only this month the council has added retail agent GCW to its existing team of Brasier Freeth to attract more tenants to the development, and director Nick Warr said there was “fresh momentum” behind the scheme, arguing the agents were “confident that with creative thinking we can deliver the right tenant mix”.
CWAC has denied the development is a failure, and this month, Lisa Harris, director of places strategy at Cheshire West & Chester, promised more announcements soon with five tenants said to be close to signing up when speaking at Place North West’s Cheshire Development Update.
So what needs to be done to drive the scheme forward?
For some, the scheme is almost beyond redemption. Tied to a struggling retail market, local developers have said the site needs a complete relaunch honing in on a leisure offering rather than retail, or a renewed focus on artisan producers and smaller local businesses to create a sense of community.
Tim Kenney, partner at property consultant Kenneymoore, said Barons Quay was “a classic example of building something of the wrong size, at the wrong time”.
“I don’t think it’ll ever be full,” he said. “It should never have been built, the design is poor, the anchors have half the size of their original commitment. We’re going to end up demolishing that scheme, or we’ll end up changing its use.”
He is not alone in his criticism. Other developers and agents contacted by Place North West point to a lack of tenants as a failing of the council, or at the very least a lack of forward planning, with a number suggesting discussions over pre-lets should have been ongoing for years before the scheme ever opened, rather than the council attempting to “pluck tenants from the sky” once it had completed.
Others, meanwhile, have questioned the wisdom of focussing the first major retailer on a supermarket brand, with a Sainsbury’s only a stone’s throw away and an Aldi, Lidl, and Tesco all a couple of minutes’ drive away.
There are suggestions that some of the current tenants have taken space rent-free, increasing the financial pressure on the council, and with major retailers like House of Fraser, New Look, Marks & Spencer, and Poundworld announcing store closures in recent weeks, the list of potential tenants appears to be slimming.
The council has even looked to have admitted this by signing off an additional £1.3m in February for the scheme, which is being used to promote events, together with creating improved signage and to fund a range of efforts to attract tenants, such as helping with professional fees and providing allowances for bespoke fit-outs.
While this isn’t unusual for retail schemes, it is a suggestion that the location is continuing to struggle.
Harris admitted the scheme may have been “over-optimistic” but denied claims that it had failed.
“It was delivered on time and on budget, and we’re in discussions with a further five occupiers with announcements due very soon,” she said. “We will change and react to the market, and we will look at more leisure.”
But further questions have been raised over the council’s expenditure on the project, with capital costs expected to reach £71m.
Developers contacted by Place North West suggest the scheme is unlikely to be worth even a third of that value even when let, leaving the council facing a lack of return on investment, particularly as the current tenants are likely to be rent-free or have been given “sweeteners” to move in.
And, in the freedom of information request, the council admitted the scheme was not based on a traditional private sector business appraisal.
“The Barons Quay business case was not based on a traditional private sector development appraisal with a target level of profit on cost or return,” said the council.
“There were a number of reasons for this, principally that the council’s involvement in the scheme resulted from market failure, i.e. the private sector weren’t taking the development forward, and that Barons Quay delivers a wide range of non-financial benefits to the area, as well as financial and economic benefits.
“When the funding of the scheme was agreed the council targeted a long term return that exceeds the cost of capital in order that the scheme is self-financing. This remains the case.”
The council has defended its approach throughout, and has openly admitted on multiple occasions that the struggling retail market has continued to impact lettings at Barons Quay.
In a statement to Place North West, Graham Pink, director of commercial management and delivery, said there had been a 22% increase in footfall since Barons Quay opened, and the cinema had “attracted significant footfall well above expectations”.
“It’s no secret that the retail market is facing challenging times but the council remains confident that, over the longer term, the development will deliver the retail and leisure needed by a thriving market town,” he said. “The Odeon cinema, Asda and Wildwood restaurant currently occupy 44% of the Barons Quay development with further lettings currently in the pipeline.
“Town centre events, are also an important part of the council’s wider cultural strategy for the town to attract new visitors into the centre.
“The upcoming Charlatans music festival with an extensive waiting list for tickets shows the strength of Northwich and underpins the confidence the council has in its future.”
This music festival will start in May and points to the council looking increasingly towards leisure to kick Barons Quay into gear.
Developer and agent consensus is that a focus on leisure will be one of the ways forward, with the success of the likes of Altrincham Market at the forefront of peoples’ minds.
Other examples elsewhere in the area include Warrington’s Time Square, which is currently under construction. In this instance, early conversations have been taking place 18 months before completion to attract tenants outside the traditional retail and leisure giants, with a focus more on bespoke and local occupiers.
Also in Northwich, CWAC has invested in Weaver Square, acquiring the lease for the 66,000 sq ft shopping centre in 2014, after the previous owner ceased trading in 2012.
The council has a 99-year ground lease on the precinct, which at present is largely empty, and has appointed architect Fletcher Rae to work up a masterplan for the area. The masterplan is now out to consultation, and Harris said the shopping centre would form an integral part of the regeneration of the town centre, acting as a complementary offering to Barons Quay.
Whatever happens next, the council faces a fight to turn Barons Quay’s reputation around from being a white elephant to a success.
As one shopper tells Place North West: “When we find out what the council want to do with this place, I hope it gets in the papers.”
Hopefully, for the right reasons.