Much of the retail property market has been siloed for too long. Department stores, out-of-town retail parks, regional shopping centres, leisure parks and outlet centres are all in many ways too isolated in their offers. Institutional landlords traditionally have had specific business space, residential or retail funds, and property advisors have therefore aligned themselves accordingly. However, ‘real’ places no longer work this way and increasingly landlords are having to adapt to consider a range of uses within an asset.
Retail destinations still offer retail of course, but they must also now be leisure, community, amenity, civic, health and wellbeing environments. They need to sit with residential and workspace, expanding their use to suit the needs of a diverse consumer base throughout the day and into the night.
Some places will see a complete departure from retail, but most, we believe, can and will survive if they evolve into blended ‘consumer hubs’. You only have to look at the buzz around market places, public realm, food halls and co-working to see what can be possible.
Yet, while many high streets and shopping centres do need to be reimagined, retail and leisure uses remain increasingly important to other property sectors. For example, retail plays an important role in creating the character and social value around a new office scheme, beyond that of simply providing additional rent at ground floor. Likewise, within hospitals or university campuses, the rental income from retail is almost secondary to the role the space plays.
For this reason the role of the retail agent is having to adapt too – for the better. At Savills we’ve witnessed first-hand how the retail environment has evolved and as a national retail team we have been involved with a number of key examples. These range from bringing office occupiers into traditional retail schemes, leading to hundreds of new customers, to introducing NHS uses into shopping centres forming what we see as a new type of anchor. We’ve broken up tired department stores into mixed-use assets and have acted for hospitals to bring their retail offers up to date to meet the expectations of their staff, patients and visitors.
There may be significant challenges facing the retail property sector at present but, excitingly, we are also all part of the solution. Our sector is at the forefront of how we transform our communities into richer, more vibrant destinations and we need to all embrace the retail repurposing journey.
Further information
Read more: Re:Imagining Retail
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