LONDON-The $933 million Eastgate Quarters retail project here in Leeds, halted since plans were announced four years ago, can now move forward now that developer Hammerson has agreed on lease terms with the first phase anchor, John Lewis Partnership. The department store chain has agreed to lease a 260,000-square-foot section.

Hammerson said in a six-month report today that it can now start detailed designs, with construction on the 1.1-million-square-foot project starting in early 2014. The John Lewis store will go in the $186 million first phase, dubbed Harewood, along with 30 additional retail stores, six restaurants and a 600-space parking garage.

Harewood will open in 2016, with a further phases following that will include another 90 anchor stores, retail and restaurants, and more than 2,500 spaces for parking. Marks & Spencer had said in 2008 that it would also open a 200,000-square-foot store at the project. The property is now mostly a parking lot, though Hammerson was able to acquire the Millgarth police station to expand its property size.

Last month, Hammerson sold the majority of its office portfolio to Brookfield Office Properties for $829 million, with plans to solely concentrate on core retail centers and development projects. In today’s statement, chairman John Nelson said that despite a fragile economic backdrop, the firm’s prime shopping centres, convenient retail parks and premium designer outlets will continue to outperform.

“Macroeconomic conditions are uncertain and household budgets in the UK and France remain under pressure, and consumer spending is likely to remain constrained into the medium term,” Nelson said. “However, Hammerson has implemented a strategy to focus on the successful sectors of the retail market. By acting decisively, we have achieved our goal of becoming a focused retail business earlier than anticipated, and we are confident that, at this point in the cycle, we can reinvest successfully to increase scale in our chosen markets.”

Instant Insights /

John Lewis Pre-Lease Allows Start of $933M London Retail

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