'We’ll go back to something better': Southampton prepares for its next normal

As the coronavirus pandemic reshapes the city and its built environment, Southampton’s real estate sector hopes to draw out the lessons.

One of the fastest-growing economies in the country before the Covid-19 pandemic hit, Southampton is now facing the myriad challenges that many towns and cities must contend with as it tries to find signs of a recovery to cling to.

For the city’s real estate sector, there are some encouraging signals. Gavin Hall, a planning director in Savills’ Southampton office, says office requirements started to pick up again as lockdown restrictions eased during the summer, and that demand for industrial space has remained strong – the latest sign of which was a 120,000 sq ft prelet at Dunsbury Park, a local business park, to Watson-Marlow Fluid Technology for a manufacturing unit.

In the city centre, however, the travails of the leisure and retail sectors remain clear. As in many towns and cities, the relationships between landlords and occupiers have become strained during the pandemic, not least in those struggling sectors. Jo McGuinness, real estate partner at Shoosmiths, is hopeful that some semblance of balance has been found in the city.

“A lot of the work has been around landlords and tenants agreeing rent concessions and rent reductions,” McGuinness says. “Some landlords are being very accommodating with retailers and those in the hospitality arena, while other landlords are taking a fairly strict approach. But generally, there does seem to be a spirit of collaboration between landlords and tenants, because it’s tough for both.”

We’re seeing a lot of interest from developers and investors looking for residential opportunities, and we’ve seen a large increase in enquiries about PRS housing, which has always been in the background a bit

Nick Jones, Aecom

20-minute neighbourhoods

As the pandemic continues, such challenges could reshape Southampton, encouraging people to spend their money locally rather than in the centre of the city and acting as a boon for some districts.

“There may be a bit of a resurgence in some of the more local district centres where there was a huge concern about the death of the high street before Covid,” Hall says. “Now that people are working from home more often, they’re going to local shops at lunchtime and doing some of that shopping in a more fluid way than working in the office nine-to-five, coming home and then going to a large supermarket at the weekend.”

Such changes are encouraging fresh thinking on the part of both the local authority and the real estate sector. Hall points to the trial pedestrianisation of Southampton’s Bedford Place, home to many bars, restaurants and independent retailers, where on-street parking has been removed to allow for outdoor seating.

Such a change is welcomed by Megan Streb, partnerships manager at Sustrans, a charity that encourages walking and cycling. She describes on-street parking as “a really inefficient way of using most of our streets”.

“Streets make up about 80% of the public space that we have in cities,” she adds. “To use them just to sit a vehicle there for hours on end, unused, seems a really bizarre way to organise what space we do actually have in our cities.”

Streb and her colleagues have called for more neighbourhoods in which everything can be reached within a 20-minute walk. She believes active travel is reshaping Southampton, a trend that has accelerated during the pandemic. Now, she adds, the council must ensure that it supports such a shift.

“We’ve been doing a lot of work on 20-minute neighbourhoods,” she says. “Looking out my front door, I’ve been seeing a lot more people walking; and a lot of that, especially in the height of lockdown, was to do the local shopping.

“What we need to make sure is that it receives the investment that, for a long time, city centres have had. A lot of our district centres, not just in Southampton, need a bit of a facelift. They need to feel more loved to make sure that they represent neighbourhoods where people want to live. And I think that would also support the recruitment and retention of the highly skilled people that we want to have in Southampton.”

That should be reflected across the built environment, from home to the workplace, Streb adds. “We need to see the facilities at both ends – to make sure that whether people live in a terraced house or a flat, they have access to secure cycle storage. And we also need to make sure that our office buildings are advertising their cycle facilities and their showers as a key amenity. People want to feel that their employer is looking after them.”

The built environment must realise that what we need to learn from this is how we can create places where people can socially engage and interact

Gavin Hall, Savills

Something better

Southampton, like other cities, may find that it benefits from people rethinking their working practices and commutes in the wake of the Covid pandemic. Nick Jones, head of the Southampton office at infrastructure company Aecom, says the city has seen “a huge uptick in interest” from people looking to move out of London.

That is likely to increase, he adds, if the travel time by train between Southampton and the capital is eventually brought down to less than an hour from around an hour and a half now.

“They want bigger houses, bigger gardens,” Jones says of house-hunters looking outside London. “The fact that they’re never going to go back to working five days a week in their office in London Bridge or Canary Wharf means that the two days a week they do have to go there, they don’t mind an hour-and-a-half commute.

“We’re seeing a lot of interest from developers and investors looking for residential opportunities, and we’ve seen a large increase in enquiries about PRS housing, which has always been in the background a bit.”

Is there a risk of positive changes from the pandemic being undone if and when normality returns? Shoosmiths’ McGuinness thinks not.

“People will want to get back into the office, but I don’t think they want to get back full-time,” she says. “I think people still want to go back into cities, but there might be a demographic shift – it might be younger people who are more prepared to get back into cities to enjoy the hospitality. I don’t think we’ll go back to what it was. I think we’ll go back to something much better.”

And the real estate industry’s role in shaping that next normal cannot be overstated, Hall says. “The built environment must realise that what we need to learn from this is how we can create places where people can socially engage and interact,” he adds. “It makes your life more valuable. That will be the crucial element.”

WATCH: Click here to view the panel sessions from EG’s Future of Southampton event