Midlands mall extension will create a place to eat, drink and be Merry

Sprawling across almost 150,000 sq ft in the suburbs to the west of Birmingham, Merry Hill has acquired almost iconic status in the Midlands since it was built in the late 1980s by local developer brothers Don and Roy Richardson.

Comprising more than 250 shops, it is the largest shopping centre in the region by some distance and the seventh largest in the UK as a whole.

When it opened, it was at the forefront of modernity, featuring what was reportedly the UK’s first drive-through McDonald’s and, for a time, its own futuristic monorail system.

But it was built in several phases and has had multiple ownerships over the years, which has led to some parts of the centre feeling disjointed and others, particularly on the upper level, becoming focused on value retailers.

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Now, its current owner Intu is looking to the future once again as it plans to commit £100m to a major leisure extension and refurbishment.

So what do the plans entail, and what will Merry Hill look like when it comes out the other side?

According to Nick Round, regional director at Intu, the aim is simple: “Lifting Merry Hill’s profile to become a major regional centre.”

He says Intu wanted to refurbish the asset as soon as it bought its 50% stake in 2014, but that it was only when it acquired the remaining 50% stake from its former partner Queensland Investment Corporation for £410m last year, which made it the sole owner, that the plans came into focus.

“The concept was always to do a major refurbishment of the centre. We saw that it provided that opportunity in terms of its size and location,” he says.

Strategic move

“We decided in June last year to buy the remaining stake as a strategic move that would allow us to accelerate what we wanted to do. We want to combine food, retail and leisure, and that is easier to do when you own the entire stake.”

The refurbishment will be comprehensive, covering everything from the centre’s entrances to the car parks. “It is an overall project that encompasses everything,” Round says, pointing to Intu’s £40m refurbishment of the Victoria Centre in Nottingham, which is currently under way, as an example of its scale.

This, he says, will account for around 20% to 30% of the £100m capital expenditure that Intu will dedicate to Merry Hill in the next seven years.

The real centrepiece, however, will be the new 100,000 sq ft leisure extension that Intu is currently working up designs for.

It is envisioned as a restaurant quarter, designed to complement the predominantly ‘grab-and-go’ food offer the centre currently has.

At present, its sit-down dining offer begins and ends with Nando’s and Pizza Express - but that is set to change. Intu has already introduced food-focused extensions at several of its centres, and Round says he would like to bring some of the brands that have taken space at the MetroCentre in Gateshead and Eldon Square in Newcastle to Merry Hill. These include ASK Italian, Byron, Giraffe, Thaikhun and Wagamama.

The extension will be anchored by a flagship leisure facility that Intu is currently exploring options for. One is to relocate the existing Odeon cinema in the complex into the new scheme. Bringing in a completely new operator is also on the table.

Intu has appointed leisure agents at Savills and JLL to find tenants for the extension and Round says that “in an ideal world” it could submit a planning application as early as the end of 2017.

The idea behind both the refurbishment and the extension is to transform Merry Hill’s current convenience and value-oriented offering and make it a slightly more upmarket retail destination.

“At the moment, our average customer comes here daily or weekly for a short time and spends a relatively small amount of money,” Round explains.

‘Destination’ feel

Post refurb, Round expects Merry Hill to become more like Intu Lakeside in Essex, which has more of a ‘destination’ feel.

“People go there less, but spend larger amounts of money because it has the right brand mix,” he says. “We try and put a smile on the face of the customer - it’s not just about shopping; it is a day out a lot of the time.”

The transformation is already under way. Ten new tenants signed up at Merry Hill last year, including formal menswear retailer Moss Bros, which left Merry Hill several years ago and has now decided to return.

Travel agent Virgin Holidays and burger restaurant Five Guys have also signed up - and Round says Intu is now in discussions with several “quality fashion brands” about taking space.

We are pretty connected in terms of the experiential things within the mall itself - Nick Round, Intu

Several existing tenants have also committed to improving their existing stores. Arcadia has upsized its Topshop unit from 5,500 sq ft to 10,000 sq ft and rebranded it as Topshop/Topman, while JD Sports has upsized from 11,000 sq ft to 28,000 sq ft.

Terms have also been agreed with River Island, which will relocate from a 13,000 sq ft unit to a 22,000 sq ft two-level store.

Providing an ‘experience’

This is a reflection of how well retailers trade there: Round says that over Christmas, JD Sports’ Merry Hill store turned over more than its Oxford Street unit.

However, he acknowledges that the shops are not everything and that like all retail landlords Intu will need to provide an experience if it is to draw customers away from online retail.

“We are pretty connected as a company in terms of the experiential side of things. We do lots of promotional activity and experiential things within the mall itself. That’s what makes the difference between Intu and other landlords,” he says. “People don’t just want a retail offer: we’ve got the scale, experience and insight to provide this compelling experience for customers.”

It might not include a monorail this time around, but if Intu gets it right the next phase of Merry Hill’s evolution could be just as exciting.

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