Regen 73

Written submission from Hammerson plc

What is the distinction, if there is one, between a property company and a regeneration company?

There is little distinction between a property company and regeneration company. The former is generally a company that owns and manages substantial assets and a key part of the business will be the redevelopment of those assets or indeed new opportunities either in partnership or through competition. The objective is to grow the portfolio and maximise returns through rental and capital growth. Note that if the regeneration opportunity is of a large scale involving substantial mixed use development then the property company will inevitably seek third party funding and/or partnerships with companies that have the specialist expertise i.e. Residential. In some cases special purpose vehicles will be set up to manage this specialist field.

My take of Regeneration Company is that it is set up specifically to plan, design, fund and deliver large scale development projects-companies that come to mind are Argent, Quintain, Capco etc who are set up differently to a normal property company.

What made you invest in regeneration in more prosperous times?

Regeneration is an essential component of the growth process. Hammerson's expertise is in the retail and office sectors. Investment purchases generally become too expensive in a good market and therefore when occupier demand is strong in a particular town or City where Hammerson have an interest then it is a logical step to promote rental and capital growth (and day one profit) through the development process

What is constraining your ability to invest at the present time?

The fundamentals of the development process are weak at present. For example in the retail sector-retailers are very selective about where they locate and how much they will pay which puts huge pressure on a developer to make development appraisals viable-as inevitably retailers want to pay less rent but in return for more rent free and capital. Demand for residential space is restrained by the lack of mortgage finance. Grants have disappeared in respect of the provision of affordable housing and therefore even more pressure on viability. Availability of bank finance is still a big barrier-not so much for Hammerson-but for businesses wanting to expand which in turn will ignite the development process. However Hammerson has spent time re-designing schemes and making them more efficient and deliverable i.e. fit for purpose. A big problem also with big regeneration schemes is the long lead in period, huge upfront costs for planning; land assembly, big infrastructure commitments which undermine cash flow/returns etc. Until the fundamentals change relative to demand/finance and more certainty on planning and costs we remain in for a long and arduous period.

Do you think the Government’s current plans will encourage investment in regeneration?

In principle the Government's plans will help and in addition to the previous answer much will depend on the Local Authority's willingness and commitment to driving through the growth agenda. There is a danger that the process could be side tracked by agitators and NIMBYS will undermine the process. Therefore it is key to have strong local leadership in the Local Authority at Leader and Chief Executive Level. It is important that processes are simplified and not made more unwieldy.

Which areas will be most and least attractive for investment under the new arrangements and why?

In geographical terms this is very difficult to say until the Government initiatives are in place. The evolution of LEPs, Enterprise Zones and TIF will be very important in setting up a strong platform for growth. The South East and London will continue to remain dominant but areas such as the North East will be testing in enabling regeneration to be kick started. In these areas the big challenge will be to attract inward investment by presenting more certainty in planning, occupier demand and delivery terms

What more could Government do to help?

I believe that the introduction of TIF will be key to plugging the gap in terms of what is or not a fundable or deliverable scheme in terms of financial returns. Whether the funding is provided by the public or private sector against future rates income it is very important that the Government give a clear steer and importantly formalise the process in order that regeneration can be kick started.

Response provided by Mike McGuiness Development Director Hammerson

Mike McGuinness is Development Director at Hammerson and is currently leading the regeneration of Brent Cross Cricklewood with the London Borough of Barnet.

Mike has specialised in major retail led urban regeneration projects across the UK since 1985. Major award winning projects that Mike has worked on include White Rose, Leeds, Canterbury and Exeter. The projects covered all aspects of the development process including site assembly, planning, design and delivery.

Mike is a member of the British Council of Shopping Centres Urban Regeneration Committee.

Hammerson PLC

Hammerson has been creating and managing some of the most exciting retail destinations and office buildings in Europe for over 60 years. A FTSE 100 company with a real estate portfolio in the UK and France of around £5.3 billion at 31 December 2010, Hammerson has investments in 17 major shopping centres and 17 retail parks. We own seven London office buildings, which provide 158,000 m² of prime accommodation.

Hammerson aims to be the best owner-manager and developer of retail and office property in the UK and France. We focus on prime regional shopping centres and out-of town retail, while exploiting opportunities in the office sector. Our strategy is to outperform through two areas of focus: maximising income growth and creating a high quality property portfolio through acquisition, development and asset management. Both areas are underpinned by prudent financial management.

Case Study: Hammerson regeneration projects Highcross Leicester and Cabot Circus Bristol 2008


In September 2008 Hammerson, together with its joint venture partners, delivered two of the largest retail-led city centre regeneration projects to have been created in the UK: Highcross in Leicester and Cabot Circus in Bristol.

Representing a combined investment of £850 million, and amounting to a total 200,300 m2 (2.1 million ft2) of new space, the two mixed-use schemes have brought about the regeneration of underused city centre sites - generating 6,000 jobs in the process - to result in two new city quarters designed by some of the world’s most respected architects.

Regeneration through design

The two schemes follow the success in 2003 of the ground breaking Bullring development in Birmingham, where Hammerson was the development partner. Once again, on Highcross Leicester and on Cabot Circus Bristol, Hammerson’s role as the principal development partner has seen the company forge a new template for city centre regeneration.

Central to this approach has been the appointment of 12 different architectural firms to create open air environments of vibrancy and architectural diversity. The result is a rich mix of design: integrating retail and leisure uses with private and social housing, providing connectivity to the existing city centre through a ‘streets and squares’ approach, creating extensive areas of public realm with renewed prominence given to historic monuments, and implementing wide-reaching public art programmes.

Bringing first time retailers to Leicester and Bristol

Hammerson’s established relationships with leading retailers and catering operators, combined with its long standing reputation as a developer and manager of high profile award-winning retail environments, has enabled it to introduce retailers not previously located in these cities before. At Highcross Leicester, 73% of retailers and 85% of restaurants in the scheme are new to the city, while at Cabot Circus, some 75% of the stores, shops and restaurants opened in Bristol’s city centre for the first time.

Transforming city status

The two schemes have transformed the status of Leicester and Bristol into premier regional destinations. Following the September openings of Highcross and Cabot Circus, the standing of the two cities in the UK’s hierarchy of leading shopping and leisure destinations was catapulted up the ranks, with Bristol rising seven places to 15th and Leicester moving up eleven places to 13th. Despite current economic conditions both schemes continue to attract record numbers of visitors. Cafés and restaurants at both schemes are proving exceptionally successful with operators reporting higher than expected sales, and some exceeding targets by 50%.

Creating sustainable environments

The application of ‘green thinking’ has been central to the design and construction processes involved in both Highcross Leicester and Cabot Circus Bristol. A real focus has been levied on reducing the consumption of natural resources, both in construction and in operation. Around 88% of materials were recycled during the retail fit-out phase at Cabot Circus. Both schemes are naturally ventilated, significantly reducing carbon emissions. Both schemes are subject to continuous testing and review across design, operations and tenant use.

The wide range of sustainability initiatives implemented at Cabot Circus has resulted in the scheme being the first retail development of its kind in the UK to achieve BREEAM Excellence. In another industry first, 127 occupiers at Highcross and Cabot Circus signed up to a ‘Green Lease’, created by Hammerson to enable landlord and tenant to work together to deliver greater energy, water and waste efficiency.

Listening to the community

Shaped by exhaustive and far-reaching consultation programmes, both Highcross Leicester and Cabot Circus Bristol have been designed to respond to community and council objectives. During the 18 month consultation programme undertaken for Cabot Circus at the planning stage over 200 individuals, representing 76 organisations, were involved in the process, while public exhibitions about Highcross Leicester generated 90% support for the proposals.

During the development stages of both projects, extensive information programmes were implemented which included: public open weekends, regular mail outs to residents, visits and talks to community groups, and ambassador tours aimed at local opinion forming stakeholders and the public in general.

Training and recruitment

While the development of Highcross and Cabot Circus generated thousands of jobs during their construction phases, the completed schemes were responsible for creating a further 6,000 employment opportunities in the retail and hospitality industries. To meet these demands for a skilled workforce, Hammerson drew on the success of the recruitment and training programmes established during the development of earlier schemes such as Bullring in Birmingham.

‘Work Highcross’ and ‘Cabot Circus Jobs’ were implemented in the form of new city charters for employment and training, which brought together the public sector, community organisations and employers. These delivered a package of free services to target employment opportunities within local communities, and also delivered recruitment and training services to meet construction, retail and hospitality employer’s requirements. The services developed by Hammerson and its joint venture partners included: a series of information days, recruitment fairs, a roving community jobs bus, and investment in an online job search and application process through dedicated websites where retailer employers were able to match available skills with appropriate vacancies. In total, Hammerson and its joint venture partners engaged with around 75,000 local jobseekers in the two cities.

The ‘Work Highcross’ website received over 17,000 registrations, while ‘Cabot Circus Jobs’ received 11,500. The recruitment fairs saw a total of 10,500 attendees for both schemes. The overwhelming success of the two initiatives has been adopted by the respective cities as a model for employment strategy across other industry sectors.

Highcross Leicester

Opened on 4th September 2008, following a three-year development and refurbishment programme, Highcross Leicester is the largest regeneration project the East Midlands’ city has seen in recent years. Developed in a 60:40 joint venture by Hammerson and Hermes, the £350 million scheme has more than doubled the retail provision in this part of the city. Comprising a substantially refurbished shopping centre, formerly known as The Shires, and the creation of an additional 60,000 m2 of new retail, leisure, restaurant and residential accommodation on an adjacent 10 hectare site, Highcross has been seamlessly integrated to provide a single vibrant destination of over 100,000 m2.

Developed in close consultation with Leicester City Council and URC Leicester Regeneration, Highcross represents a major part of a wider £3 billion regeneration programme to revitalise the city. Together with other new city-wide projects, the combination of premier city centre living, shopping, dining and entertainment provided by Highcross, will position Leicester as the dominant regional destination for the East Midlands.

The scheme houses 120 retailers, three department stores – including John Lewis, Debenhams, and House of Fraser – 15 new cafés and restaurants, 120 residential apartments, 3,000 parking spaces, and Leicester’s very first city centre multiplex cinema.

Key regeneration benefits brought to Leicester through Highcross:

Built environment

· Maximising the potential of an existing successful shopping centre

· Bringing a 10 hectare former industrial site back into economic use

· Creating new accommodation for retailers unable to establish a first time presence in the city centre

· Introducing a mix of uses not previously seen in the centre of Leicester

· Opening up the city by creating two new public squares – St Peter’s Square and Old Grammar School Court – and pedestrian streets with linkages through to neighbouring areas and reinstating historic street patterns such as Bathhouse Lane and Highcross Lane

· Creating a development of design excellence through the appointment of six architectural firms including: Chapman Taylor Architects, Foreign Office Architects, Glen Howells Architects, Gollifer Langston Architects, Stiff & Trevillion, McCusker Storey McIntosh

· Introducing iconic landmarks to Leicester’s cityscape with dramatic designs for the scheme’s two anchor buildings – John Lewis and Cinema de Lux.


· Re-invigorating the city’s evening economy through the creation a new restaurant quarter and the city centre’s first multiplex cinema

· Expanding the city’s retail offer through the introduction of a range of high quality fashion and lifestyle retailers to keep Leicester’s shoppers in the city

· Restoring historic listed buildings such as the Old Grammar School and 59A Highcross Street and giving them new life as restaurants

· Re-positioning the city’s national profile through comprehensive marketing and media campaigns


· Providing 3,000 jobs in the construction, retail and hospitality industries

· Creating an industry model for employment and training initiatives through the ‘Work Highcross’ charter designed to establish ‘job’ ready candidates

· Investing £1.45 million in public art around the scheme incorporating works by renowned artists such as Katayoun Pasban Dowlatashahi, Jacqui Poncelet, and Jason Bruges.

Cabot Circus Bristol

Formed in direct response to Bristol City Council’s long-standing aim to achieve a renaissance in Bristol’s Broadmead area, The Bristol Alliance – a partnership between Hammerson and Land Securities – has delivered one of the largest and most important regeneration programmes since the city’s post-world war two reconstruction.

Cabot Circus opened on 25th September 2008. The £500 million scheme forms a spectacular gateway to the city and represents a true city quarter incorporating nine different uses including: retail, leisure, market housing, social housing, student accommodation, offices, hotel, cinema, and public spaces.

The 140,000 m2 (1.5 million ft2) mixed-use development provides over 92,000 m2 (1 million ft2) of shopping and leisure arranged around three new pedestrian streets converging on a central piazza under a stunning curved glass roof. The scheme houses 140 retailers, department stores for House of Fraser and Harvey Nichols, 25 new cafés and restaurants, a 13-screen Cinema de Lux.

Key regeneration benefits brought to Bristol through Cabot Circus:

Built environment

· Bringing a 38 acre site back into economic use

· Creating new accommodation to enable retailers to establish a first time presence in the city centre

· Introducing a higher ratio of non-retail uses than previously seen in a city centre regeneration project

· Providing new open spaces such as Quakers Friars, The Circus, and three new pedestrian streets

· Creating architectural variety through the appointment of firms such as Chapman Taylor Architects, Stanton Williams, Alec French, Wilkinson Eyre, EPR, AWW Architects and Stride Treglown

· Restoring two listed Dominican Friary buildings and an 18th century Quakers Meeting House to form the centrepiece of a new restaurant quarter


· Re-invigorating the city’s evening entertainment economy through the creation of two new restaurant quarters, the provision of a multiplex cinema and a 150-bed Future Inns Hotel

· Expanding the city’s retail offer through the introduction of a range of high quality fashion and lifestyle retailers to keep Bristol’s shoppers in the city

· Re-positioning the city’s national profile through comprehensive marketing and media campaigns


· Creating a range of new ‘city-centre living’ homes including: 32 apartments for rent, 200 apartments for sale, 24 affordable housing units, and a 280-bed student residence

· Providing 7,500 jobs in the construction, retail and hospitality industries

· Providing a comprehensive package of employment and training initiatives through the ‘Cabot Circus Jobs’ charter

· Investing £12.5 million in public art around the scheme incorporating the work of over 20 different artists such as Nayan Kulkarni, Susanna Heron, Esther Rolinson, Timorous Beasties, Ackroyd & Harvey, Vong Phaophanit, Claire Oboussier, Ralph Hoyte, and Clare Morgan.

Case Study: Hammerson Local Employment and Training Programme -Work Highcross, Cabot Circus Jobs and Jobs for U.

The development of a new retail and leisure quarter within a city creates demand for a skilled workforce in both the construction, retail and hospitality industries. Following the successful creation of recruitment and training schemes during the company’s development of The Oracle, WestQuay and Bullring, a dedicated programme was established by Hammerson for our recent developments in Leicester, Bristol and Aberdeen.

The vision these schemes was to provide the local community with access to employment opportunities whilst offering a comprehensive package of services to meet retail and hospitality employer’s recruitment and training needs. 

To encourage employers and public sector organisations to work together Hammerson developed partnerships with a wide range of public sector and third sector organisations. The partnerships were underpinned by a Charter for Employment and Training, instigated by Hammerson this established a strategic vision for the public sector, community and voluntary organisations to work collaboratively focused on the requirements of the retail and hospitality sectors.

With the creation of over 7,000 retail-related jobs at Highcross, Cabot Circus and Union Square a number of initiatives were developed to target local communities with particularly high pockets of unemployment:

Ø Work Highcross Cabot Circus Jobs for U website: With over 67,000 registrations received across the three websites, the site provided retailers with the infrastructure to advertise their vacancies and recruit their workforce. It enabled jobseekers to register their details and directly apply on line to jobs. This service was free to both retailers and jobseekers alike and had never been delivered on this scale before.

Ø Recruitment Fair: Over 2 weekends in June 2008 over 10,000 people visited recruitment fairs in Leicester and Bristol. These events offered the chance to meet retailers such as John Lewis, Yo Sushi!, Ghost, A-Wear, Harvey Nichols and receive career advice. In Aberdeen a series of community jobs fairs took place in partnership with Jobcentre Plus. Over 1000 people attended the first city centre Jobs Fair to take place in 5 years, with Hammerson and Union square retailers exhibiting.

Ø Reaching out to the community - Work Highcross Roadshow and Cabot Circus Jobs Bus: With the aim of engaging local people in the heart of their communities around employment and training opportunities and equipped with a range of material to help people including career information packs and laptops. 7,400 people attended the Work Highcross roadshow at 54 community locations & events across Leicestershire. In Bristol around 10,000 people visited the Cabot Circus Jobs bus and community events.

Ø Pre-employment training: In all three cities local colleges and training providers delivered two week pre-employment training programmes aimed at those who are currently unemployed. Over 1000 jobseekers have completed pre-employment training courses specifically designed to improve skills in either the retail, hospitality, catering and security industries. Piloted for the first time the retail courses were developed by Skillsmart Retail, the Sector Skills Council, in response to retailer’s demands for a course that would introduce people into retail and help to challenge perceptions about career progression. The courses provide an insight into the skills that are required to work in retail and helped to build the trainee’s confidence and prepare them for interview.

The jobs campaigns in Leicester, Bristol and Aberdeen engaged over 85,000 members of the local community across all three cities. From the data that the partnership has collated to date we know that 72% of individuals in Leicester employed at Highcross were previously unemployed or young people aged 16-19 not in education, employment or training, with 52% living in Leicester’s priority wards and 67% from the BME groups. In Bristol and Aberdeen similar results have been achieved with 50% previously unemployed into jobs at Cabot Circus and Union square

Over 160 retailers ranging from John Lewis, Harvey Nichols, House of Fraser, National Amusements, Cine UK and Yo Sushi! Have been supported by our partnership approach. Their response to the programme has been exceptional, with retailers such as John Lewis, Wagamama, Next and New Look offering guaranteed interview places for trainees from the pre-employment training programme.  Some retailers were able to recruit their entire workforce through the jobs fair.

The success of Work Highcross, Cabot Circus, and Jobs for U has not only provided training and employment opportunities to individuals but has also achieved city wide regeneration benefits.  The public sector organisations involved in these partnerships are now using the initiative as the recruitment and training model to support further regeneration projects in other industry sectors.


Supporting quotes:

The Hospitality Works programme helped to provide opportunities to people and candidates attending assessment days ensuring they were prepared and interested in the brand. Companies would be mad not to utilise the facilities and support available and its great advertising for the company as there are three Nando’s in Leicester who will all benefit."

Clive Greening, Store Manager, Highcross Nando's


"It was always our aim to support the city in getting unemployed people back into work and reassuring that we have actually managed to do this by all working together. Let’s hope this sets the platform for the future."

Barbara Jacobs, Manager Personnel Operations, John Lewis

"This has been an excellent example of where the private sector and public agencies can work together for the benefit of business, as well as tackling the wider issues of long term unemployment. This is clearly a successful model that should be rolled out in other parts of the country. "

Martin Traynor, Managing Director of Leicestershire Chamber of Commerce

"This is Leicester at its best.  New jobs, new skills, new workplaces. A partnership of private sector business and public sector agencies working together to bring new hope to those out of work. This is a partnership model that we can be built on; giving the unemployed new skills using local trainers to be job ready for work with local employers."

Richard Brucciani, Chair of Leicester Employment & Skills Board

May 2011

Prepared 24th June 2011