Looking on the bright side
Write up of our event: Reimagining Retail, by Tim Horsey, SPR member
Today is clearly a moment of rapid change for retail. As Tom Whittington, Director of Retail & Leisure Research at Savills, the principal speaker at this joint Society for Location Analysis/SPR seminar said, the market conditions for retail have been in upheaval since online shopping started to take hold. New consumption patterns mean it is now essential that bricks-and-mortar retail finds a much greater relevance to communities. At the same time sustainability concerns have risen up the agenda for owners and operators.
Whittington avoided using the word crisis, but some of his observations based on seven years of research on this subject were bleak. The UK now has 15 million sq ft of retail voids, 40% of which are redundant space, while the sector is set to be 25% oversupplied by 2030. Many department stores have closed, while a ‘lost middle’ of retail centres seems stranded between more relevant ‘destination’ and local locations.
Still, Whittington stressed that all is not lost. Lower pricing is giving the opportunity for renewal across the sector. Communities need to be asked what they want from these assets and locations, something that doesn’t often happen. Revival is likely to mean a hybrid model, with renewed vibrancy dependent on a new mix of uses. This in turn implies repurposing many retail assets to the likes of healthcare, living, working, social hubs and culture – something that is now starting to happen.
The sustainability equation is also challenging, with 83% of retail space requiring upgrade to meet the EPC requirements proposed for 2030, with a potential cost of £50-90 billion. Shopping centres and retail parks are particularly affected. Then there is the question of embedded carbon in buildings – for instance, M&S wants to completely rebuild its Oxford Street flagship, while the government would prefer it to retrofit. This may give a precedent for planning decisions elsewhere, even though no two situations will be the same.
Participants in the panel session, which was led by Andy Thompson, Co-chair of the SLA, mirrored Whittington’s overall positivity. Sam Fox, Head of Research and Analytics at Ellandi, which has created asset development and management strategies for urban centres such as Bradford, Blackpool and Milton Keynes, stressed that different locations would need different solutions. Some might require the complete demolition of part of the centre while others could rely more on repurposing. She also emphasised the importance of taking needs of the local catchment into account, not just the town itself. Judging what will work often means detailed market research among the community, she added.
Matt Soffair, Senior Strategist, LGIM Real Assets agreed with all the speakers that retail should be viewed in the context of the whole urban realm, as has been the case with their own input to Poole town centre. This has not just entailed reimagining the shopping centre they originally owned but also changing the character of some of the surrounding streets to bring a greater sense of amenity and relevance, for example introducing co-working facilities and an NHS hub. Soffair also noted that there needs to be far greater investment in retail generally as this has been hugely lacking over the past decade – this will most likely entail collaboration between the public and private sectors.
The Kings Cross development is a great example of what can be achieved along these lines, suggested Samantha Bain-Mollison, formerly of Shaftesbury PLC. Particularly impressive has been its success in simultaneously meeting the needs of both tourists and the local community, part of which has been achieved by having public realm that is attractive to both. She also emphasised the importance of building in flexibility to new projects, as change is getting ever more rapid and unpredictable.
Tim Horsey