£160M Outlet Mall Deal: Why It's Bricks And Clicks In Midlands Retail
A new £160M designer outlet mall at Cannock will go ahead, thanks to funding from a joint venture including U+I with a 12.5% stake, and a consortium of McArthurGlen, Aviva Investors and the Richardson family taking 87.5%.
The 279K SF Mill Green site will provide 130 designer outlet stores along with restaurants and car parking close to both the M6 and M6 toll road.
The deal comes just weeks after Sandwell Council agreed to press on with plans for a 200K SF designer outlet on a 55-acre council-owned site at Oldbury, close to junction 2 of the M5 motorway. It is just five miles from Birmingham city centre.
The council agreed in November to extend its agreement with developer Jeremy Knight-Adams to give time for a planning application before autumn 2018.
A report to the council’s cabinet insisted the scheme be directed at high-end brands.
Plans have also been floated by Rioja Developments for a 220K SF outlet village at Grantham, serving the East Midlands.
The surge of interest in outlet malls has in part been prompted by the success at Bicester Outlet Village, but is also because outlets can compete with the bargain-hunt thrill of online retail.
“Outlet malls offer a different consumer experience from shopping centres and the high street," Cushman & Wakefield retail team partner in Birmingham Adam Lazenbury said. "There is a mindset they offer affordable luxury/value for money which is comparable to online shopping. Consumers are also demanding a more immersive brand experience which has an element of exclusivity when purchasing high-end designer goods."
With consumers prepared to drive between 60 and 90 minutes to reach an outlet village, the Midlands motorway network makes it an appealing location. Free parking and environment are key and many locations also have a food, beverage and leisure offer contributing to the full customer experience. Click-weary internet shoppers have every reason to give Midlands outlet malls a try.
Worldwide Director at J. Walter Thompson’s The Innovation Group Lucie Greene said: “Outlet malls are another growth spot in retail. There’s a surge in off-price retail both on and offline.
"Outlet malls are also destinations consumers travel to — and centres of leisure and entertainment. It’s a bit different to the local mall. The new model is fewer, bigger.”
Despite developer confidence, outlet malls’ resilience should not be over-stated: reports from the U.S., where outlets have long weathered the changes wrought by online retail, suggest their appeal is waning.
