The £1.2bn shopping spree

Martin Ellis

Are you telling me you’ve never been to Lakeside?” Martin Ellis is incredulous. “But it’s only an hour away from where you live. You don’t even need a car, you can get there by train!” He gestures to an aerial photograph of the development hanging on his office wall. “It ticks all the boxes. It has all the shops you want, it’s pleasant to walk through – and it has fantastic toilets.”

You’ll rarely meet a man as enthusiastic about shopping as Ellis, and as construction director of developer Capital Shopping Centres, he’s planning quite a spree – £1.2bn over the next five years. In a former life, he was the project manager for QS Gardiner & Theobald at Lakeside but he took up the newly created post at CSC a year ago to manage a staggering 800% increase in its spending, as several long planned

developments came on line. Last year, the company put £24m of work the construction industry’s way; this year it will commission £208m. As you might expect, Ellis is looking for contractors and consultants to help him spend it.

CSC is one of a handful of developers that focus exclusively on shopping centres, and although it will tag on residential and office units at the planners’ behest, it is this wholehearted commitment to retail that has won it admirers. “From top down they are retail through and through,” says John Strachan, head of retail at agent Cushman & Wakefield. “They are highly professional, experienced and knowledgeable in their field.”

Neither is it scared by headlines proclaiming the sector’s decline. Ellis explains: “We are a property company, not a retailer. Plus, we go for quality shopping centres in prime locations, which fare better in tough times.”

Braehead in Glasgow was developed by CSC

CSC has 10 big projects under way – naturally all are shopping centres. The biggest is the £535m extension of the St David’s Centre, Cardiff, a joint venture with Land Securities that is due for completion in 2009. This pace shows no signs of slowing under Kay Chaldecott, CSC’s new managing director. In her first year she has overseen the acquisition of three malls: the Arndale Centre in Manchester, Cribbs Causeway in Bristol, and Chapelfield in Norwich. Ellis says further acquisitions, both existing and under development, are planned.

You don’t have to have experience of retail to work for Ellis, but an understanding of the sector’s requirements definitely helps. He recently appointed Allies and Morrison, an architect with little retail experience, because it understood the design needs of a shopping centre. “We are not here to win awards. We want good design but it has to be commercially viable. If the architect is precious about their designs it makes our life much harder. Allies and Morrison clearly indicated that they do good design but they aren’t precious about it.”

Contractors and consultants, too, have to be prepared to swallow their pride and muck in where need be. It’s not so much about satisfying CSC as its own clients, the retailers. “What drives us is our tenants. We have to deliver to their timescales,” says Ellis.

CSC starts work on a mall before it knows which shops will want to move in, so designs often change. And retail tenants can be tricky customers. John Lewis, for example, has signed up to be the anchor tenant of the Cardiff scheme, occupying 260,000 ft2 of floor space. “They have the clout to be able to demand all sorts of things. They want a lot of control and to be able to direct the way that we do things,” says Ellis.

It is supposed to be up to tenants to handle the fit-out of their own stores, but Ellis says the big names usually ask CSC to provide certain elements normally classed as fit-out, none of which will have been in the contract. These include screeding and the installation of escalators, lifts or generators. He adds that such tenants tend to have armies of in-house experts and third-party consultants to keep an eye on construction. “We demand that the contractor has the systems in place to deal with these situations. It could mean that they have to bring in a separate construction team to deal with a particular issue,” he says.

Gateshead’s MetroCentre was developed by CSC

This is what happened to the Sir Robert McAlpine team building the MetroCentre extension in Gateshead. CSC pulled off something of a coup by signing up womenswear retailer Zara, which then demanded a lift pit and shaft, escalator pits, a mezzanine floor and a beefed-up power supply – all to be completed in just eight weeks. “Zara is an important tenant, so we were quite demanding on McAlpine, but they did it,” says Ellis.

Ellis is in the process of reviewing CSC’s line-up of consultants, not only to cope with the increase in spending but also because he believes “it’s healthy to widen the net”. It normally uses Gardiner & Theobald and Cyril Sweett for large projects, and has begun working with Tweeds. Ellis recently invited 14 QS practices to pitch for inclusion on CSC’s preferred list of firms, and is now in the midst of the selection process. CSC plans to repeat the process with engineers, structural engineers, M&E contractors and shopfit control consultants. On the contracting front, it is also talking to Laing O’Rourke and InteriorExterior.

Be careful what you say in your pitch, though. From now on, Ellis says he’s recording everything firms say in their initial presentations and setting it all down in stone in the contract. Having been on the other side of the table at G&T, he’s not an easy man to impress. “I do ask people searching questions,” he says. “I’ve been a consultant project manager and I know they make wild promises about the amount of time they’ll spend on a job.”