development of a new shopping centre in the two locations
There is one shopping centre and two proposed locations,so you should mansion it,as well as summarize information about the better place to build.
S2 is surrounded
You cannot write like this,S2 is not a thing,it is a place,area,location,site. Thus,it should be the location for shopping centre (S2) is situated in the resident area.
So, can we conclude that the S1 has no bargains for a better spot?
Never use question sentences in task 1. It is not an essay!
I do believe that creation of two separate paragraphs about each location is a good idea.
Otherwise, you can use first paragraph to compare locations in terms of destination from different areas , and second para in comparison to other cities.
Anyway good luck.