Despite plenty of challenges and negative headlines in the press, there are still positive stories for the retail sector. Retail sales have increased 4 per cent in the last 12 months and community shopping centre voids have decreased from 7 to 5 per cent in the last year. Community assets in particular are proving more resilient than other shopping centres.

The community retail offering differs from other retail assets in its ability to adapt and provide the catchment population with the services and retail provision that works best for it. For example, the shopping centre may have a gym, a local pop-up or even a microbrewery amongst the more traditional occupiers.

This shift away from the mainstream retail mix has made the sector more resilient to the recent flurry of company voluntary agreements (CVAs). Community centres weren’t priorities for the expansion of brands such as House of Fraser and Carpetright, and therefore haven’t been susceptible as other locations as these brands have subsequently shrunk their store portfolios, although some have been more vulnerable to closures by New Look and Poundworld.

A lack of online penetration is another reason why these shopping centres have remained resilient in the face of current retail headwinds. Online trade accounts for only 12 per cent of the UK sales of the top 100 community shopping centre brands compared to 20 per cent in regional malls. People remain loyal to their local shopping centre, with 70 per cent of survey respondents saying they would not have made their purchase online. The independent retailers that are more prevalent in these centres often have less of a web presence than larger brands encouraging customers to actively visit the store.

From an investment perspective a community shopping centre offers an asset manager the chance to orchestrate the right tenant mix. Creating a retail and leisure provision that reflects the needs of the population should future-proof an asset and help keep footfall levels buoyant. There is an element of ‘social return’ from the asset class as well, offering the chance to breathe new life into a town centre. A popular centre will provide the landlord with a steady rent roll from a range of sources as well at the opportunity for rental growth as leases expire and tenants move on.

Further information

Read more: Community shopping centres remain resilient