Gloucester Quays, the designer outlet, yesterday opened with 40 shops open, and a further 16 leased and ready to trade in the next few weeks.

But the outlet, a joint venture between Peel Holdings and British Waterways, has been a victim of the recession.

Only the covered mall of 180,000 sq ft opened 76% let. A parallel 20,000 sq ft outdoor mall will remain closed until September because of lack of demand.

This mall was to have been a mix of shops and restaurants. When only three retailers, one prelet and no restaurant operators signed up, Peel relocated the three retailers into the indoor part of the scheme.

The leases of the three shops say they can move outside when the exterior part of Gloucester Quays opens.

Equally, Peel has conceded that a restaurant at first-floor level, running above the entire length of the shops of the covered mall was unrealistic because there is already consent for 35,000 sq ft of restaurants and bars at the scheme.

The upper level will now be dedicated to exhibition space. Gloucester Quays director, Franco Muccini, said that it would be more profitable to lease out the 15,000 sq ft upper level for exhibitions.

On 30 May Channel 4 fashion expert Gok Wan will perform the opening ceremony.

This change of use has left Gloucester Quays with fewer restaurants, and only two, Costa Coffee and Presto, were open yesterday. But Muccini pointed out that shoppers could eat at the Burger King, Angel Chef or Pizza Hut that face Gloucester Quays in Peel Centre Retail Park on St Ann Way.

Shoppers could also visit Marks & Spencer’s largest outlet store of 10,000 sq ft, facing out on to St Ann Way. Visitors could then walk along the enclosed granite mall, past only a few void shops.

Muccini said that as one empty unit is next to Marks & Spencer and the other next to Next Clearance, both would let soon. Iceberg, LK Bennett, Gap, Next and Calvin Klein are among the retailers.

… amid fears that scheme will hurt city centre

Parmjit Dhanda, Labour MP for Gloucester, told MPs during a Commons debate on Wednesday 13 May of fears that Gloucester Quays could hurt the city centre.

He pleaded for government money to improve links between the outlet and the town’s prime retail pitch.

‘People have been coming up to me and saying: what’s going on in the docks is fantastic. But what about the town centre? Will it die as a consequence of that?’

Dhanda predicted the centre would not die, as long as Gloucester received the £7.4m promised by the South West of England Regional Development Agency to pay for ‘public realm linkages’ from the city centre to the docks.

‘People can go to Gloucester Cathedral, to the docks, visit the new designer outlet centre and use Kings Square and other shops in the town centre,’ he said.

Dhanda conceded that he received more complaints about Kings Square than any other site in the city, and said the Prince of Wales would call it a carbuncle.

‘Local authorities may try to cover themselves in glory by making pledges just before local elections that they will bring in the JCBs to do the work within a few weeks, but it never happens,’ he said.

Dhanda initiated the debate in anticipation of the development agency’s meeting last Monday to revise its priorities because of funding cuts.

He asked Claire Ward, the minister answering the debate, to persuade the government not to turn off the tap of funding for Gloucester projects.

But Ward replied that the regional development agency must work within its financial allocation and re-prioritise its investment plans and existing financial commitments.

Source: www.propertyweek.com, 22.05.09