Our cities and urban centres are economic, social and community hubs. That is why it is critical that more is done to support their revival and growth.
While the rate of store closures has slowed, following a peak in 2020, retail and leisure businesses are still evaluating the long-term impact that Covid-19 has had on consumer behaviour. The office and residential sectors are also navigating changes to people’s working practices and lifestyles.
Combine this with current economic uncertainty and rising inflation, and it’s a stormy outlook.
Evidence of the clouds gathering above can be seen reflected in the number of vacant or dilapidated properties in some of our city centres, shopping schemes and high streets. Though some sectors and areas are faring better than others, change is needed to truly “level up” our urban centres – making them more accessible while driving new footfall and economic growth.
A major obstacle to achieving this, however, is a lack of access to properties, in particular for occupiers such as community entrepreneurs or more social-purpose ventures.
It is this challenge that the cross-sector coalition Platform Places was set up to overcome.
Meeting of minds
Bringing together retailers, local authorities, landlords, investors and community organisations, alongside think tank Radix, Platform Places is putting forward workable solutions for revitalising our urban centres by maximising the power of real estate.
The coalition launched in 2021, with Shoosmiths joining partners including the British Property Federation, charitable trust Power to Change, local government network New Local, Radix and members of the High Streets Task Force.
In July 2022, the coalition launched its first report, A Platform for Places, which features new plans to bring underutilised property back into use – enabling businesses, landlords, investors and local authorities to benefit from thriving new places and partnerships.
A Platform for Places: the proposals
The creation of a High Street Buyout Fund to help communities move at the pace of the market to purchase empty high street property and build long-term resilience in town centres.- A specific business rates relief for regulated socially trading organisations (community interest companies and community benefit societies), set at a minimum of 50 per cent of their business rates bill.
- A proposal that the Department for Levelling Up, Housing and Communities directs local authorities to adopt community lettings policies to enable council property teams to lease or sell assets on favourable terms, to support local social enterprises.
- Growing the Heritage Development Trust model, piloted by the Historic Coventry Trust, to use historical assets to revitalise high streets – modelled on the Scottish Land Fund.
- A consultation process around community right to buy, to help community groups purchase long-term vacant or derelict property (as in Scotland), with suitable protections for landowners.
- Support, as a last resort, for councils to use CPOs to tackle buildings that are long-term vacant or derelict without a valid reason.
The proposals are centred on providing fledgling or smaller enterprises with a way to access property. This is crucial to bridging the gap for less established businesses, which often do not have vast resources but are well placed to maximise underutilised or vacant assets.
This isn’t just about altruism, though. The plans have been developed to ensure they can be commercially viable for landlords and investors, as well as those community-led or smaller businesses. They are also based on scaling up successful case studies from cities including Oxford, Sheffield, Belfast and Plymouth, and ensuring that the solutions provide a win-win for both sides.
Although there are backstops for long-term vacant properties, with a proposed consultation process around community right to buy or use of compulsory purchase orders, the report seeks to encourage collaboration, showing what can be achieved – socially and commercially – by bringing organisations and people together.
Added vibrancy
Legal & General’s approach to its scheme at Kingland Crescent in Poole, Dorset, helps to demonstrate the benefits of this type of working and is an inspiration for some of the recommendations in the report.
The centre is a bold departure from traditional retail schemes. It operates on a rent-and rates-free basis and is incubating a number of smaller businesses, including a design studio, surfboard shop and zero-waste grocery store. The scheme also operates a makers market, featuring space for more than 15 vendors and a calendar of 500 curated annual events.
The benefits are twofold, with Matt Soffair, research manager for retail and leisure real assets at L&G Investment Management, commenting: “We see these sorts of local businesses and the relationships around them as the future of high street retail. We know that they bring vibrancy, impact and footfall and expect that, in time, most will become paying occupiers – likely on a revenue share model.”
So, the scheme is not only driving footfall, which L&G hopes will benefit its neighbouring shopping centre, but also represents a way for smaller businesses to start up and succeed, before potentially becoming paying occupiers in the long term.
Elsewhere, the Meanwhile in Oxfordshire programme, developed by Oxford City Council, has identified, secured and fitted out 20 underused buildings in the city, with a further five secured and in the process of being refurbished. Capital grants are enabling these empty spaces to be brought back into use at affordable rates, supporting more than 100 smaller businesses.
Both examples reaffirm an important message: social value and commercial success are not mutually exclusive, but closely linked.
By opening up properties to a more diverse range of occupiers, landlords and investors can meet environmental, social and governance targets, while contributing to business success by either creating or bolstering schemes with a roster of new entrepreneurial or creative occupiers that can boost footfall in the short term and also have opportunity to scale commercially in the future.
There are hurdles to these proposals. One question that the coalition has dealt with is whether these leasing models could risk creating challenges with other tenants, for example in rent review negotiations. It’s a valid point, but one that can be overcome with the right proposition.
We believe that the coalition and its proposals are the starting point towards creating a more joined-up, future-proofed vision for our urban centres. However, true success hinges on bringing together public and private partners that can realise the potential at a national scale.
Nathan Rees is a real estate partner at Shoosmiths
